How to Price Your Home

How to Price Your Home Pricing decisions should be grounded in reality rather than wishful thinking. When the time comes to price your home for sale, you may be tempted to start with the price you paid for it, add a healthy markup and call it a day. Here are four strategies to help you figure out how much your home is worth:

1) Abandon your personal point of view. How much will a ready, willing and able buyer be willing to pay for your home? Buyers don’t care how much you paid for the home, how many memorable moments you and your family shared in the home, how much cash you need for the down payment on your next home or how much time and money you’ve invested in your home’s hardwood floors, fresh paint, lush landscaping or other improvements.

2) Consult a Professional Invite a real estate agent to visit your home and give you their opinion of its likely selling price. Ask for a “comparative market analysis” (CMA), which shows the prices of comparable recently sold homes, on-the-market homes and homes that were on the market, but weren’t sold. The on-the-market homes are the “competition” for your home. Some agents will suggest a flatteringly high price to “buy” your listing only to demand a price reduction a few weeks later. It’s just better to get a blunt and honest pricing valuation.

3) Do your own market research. Go to open houses in your neighborhood and try to make an impartial assessment of how those homes compare to yours in terms of location, size, amenities and condition. Assuming all the asking prices were the same, would you buy your home or someone else’s?

4) Consider market conditions. Are home prices in your area trending upwards or downwards? Are homes selling quickly or languishing? Will your home be on the market in the spring home-buying season or the dead of winter? Are interest rates attractive? Is the economy hot or cold? Is the job market strong? And will you be selling in a buyer’s market or a seller’s market?