One of the toughest parts about listing your home is selecting the appropriate price. You don’t want to list too high as this could dissuade buyers from contacting or offering, and by the time you’re in the right price range, you’ve been on the market too long and buyers try to talk you down. Some of the best offers you will receive are in those first 30 days on the market as buyers are concerned that there is other interest, if you’ve been on the market over 30 days, they feel there is less competition and try to talk you down. On the other hand, you don’t want to list too low and leave money on the table.
The very best way to finalize a list price is to do exactly what the appraisers and real estate agents do, pull comparables. To do this, you will want to make a few adjustments in your search. Start off with a mile radius in your search and pull homes that are currently active, pending homes (ones that have accepted an offer) and closed homes that have sold in the last 6 months. Search within 10-15% of your square footage, within 10 years of your year built, same number of levels (one story home, two story etc), homes with pools if yours has a pool, same number of garage spaces, lot size etc. After this initial search, there may not be many homes that come up. The goal is always at least 5 similar homes to determine your list price. If you don’t have the comparables you hoped for, begin to slowly remove some of the criteria. For example, the year built and check your results. Then, perhaps lot size and make a mental adjustment for what results come up, remove garage spaces, then increase the square footage to 20%, your area radius can sometimes grow up to 5 miles in the event not many comparables come up. These slight adjustments should provide enough comparables to obtain a realistic price of what you could sell your home for.
Many times calculating the price per square foot and then comparing that to your home will be another indication. For example, if a 2500 sq ft home sold for $500,000, that leaves a price per square foot of $200. If your home is 2650 sq ft, take that $200 and multiple by your price per square foot and you will obtain an estimated list price of $530,000. If all else fails, you can contact a lender and order an appraisal. Just keep in mind that appraisals are simply an opinion of value and may differ from the appraisal your buyer ultimately obtains. Ultimately when you list a home, you are never obligated to sell for that price, the obligation is only created when you sign an accepted offer thus creating a contract to perform. So come up with a list price you are happy with, yet is still realistic to the market.