Dear Olivia,
I’m curious – how does a Realtor determine a home’s asking price?
Sincerely,
A Curious Seller
Selling your home can be exciting and challenging, especially if you’re navigating the process for the first time. One of the crucial decisions you and your Realtor will face is determining the asking price for your property. The wrong price can result in your home sitting on the market for a long time. But the right price can attract potential buyers (maybe even multiple buyers) and is more likely to get you at, near, or above the asking price.
Here are three essential tips to guide you in setting the perfect asking price for your home.
Realtors Rely on Comps
“Comps” or comparables are homes similar to yours that have sold recently. Note that these homes are similar, so there’s some leeway here.
For example, if your home has three bedrooms, one bath, and 1,200 square feet on a .16-acre lot, your Realtor might pull a comp with three bedrooms, 1.75 baths, and 1,400 square feet on a .14-acre lot. They aren’t the same, but they’re close enough to provide valuable information about the price your home might support.
But comps don’t just explore nuts and bolts like bedrooms, baths, and square feet. Your Realtor will also consider features, amenities, and recent updates to comparable properties. In larger cities, comps are often in the same neighborhood to ensure similarity, but around here, we cast a little wider net. So, if you live on West Monroe in Riverton, your Realtor might present you with comps on Pinecrest Street, West Pershing, and Kinnikinnick Drive.
By examining comps, your Realtor will get a better idea of market conditions and the going rates for properties like yours. They will then use that information to present you with a suggested range of asking prices for your property that’s realistic and competitive.
A Competitive Market Analysis (CMA) is Key
While comparable properties offer a baseline for your Realtor to determine a suggested asking price, it’s also crucial to assess what makes your home stand out from the crowd. Your Realtor can do this with some input from you (and a walkthrough of your home).
Where Realtors often do not physically see the comps they use to determine the asking price of your home, they will need to see your home up close and personal. They’ll take note of any unique features, upgrades, or renovations that add value to the property. Whether it’s a newly renovated kitchen, a spacious backyard, or energy-efficient appliances, these features can justify a higher asking price.
It’s helpful if you can provide specific details about your home’s features and updates. For example, a spreadsheet that notes major updates, when they were done, and who did the work will help your Realtor determine a more specific home value. It’s also valuable information for them to have when it comes time to market your home for sale.
Rely on Your Realtor’s Expertise
Experienced real estate agents have a deep understanding of our local market and can provide expert advice on setting the right asking price for your property. They can conduct a comparative market analysis (CMA), taking into account the many different factors that influence home values in our area. Collaborating with a real estate agent helps you set an informed asking price and ensures that your property is positioned strategically in the market, increasing the likelihood of a successful sale sooner rather than later.
By following these tips, you can confidently navigate the pricing process, attracting potential buyers and maximizing the value of your home on the market. Remember, a well-priced home is not just a property for sale; it’s an open invitation for potential buyers to submit an offer!
Have more questions about selling your home or other real estate topics? Don’t hesitate to reach out to me at 307-856-3999!
~Olivia