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Determining a House Selling Price

Real Estate
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Determining a house selling price is far from an exact science, especially when you choose to tackle it without the help of a realtor. Because selling your home in a reasonable length of time is all about balancing your wants with those of your buyers, it’s important you take a variety of factors into account before picking a sales figure. By implementing three varied home pricing approaches, you can begin the pricing process in a practical manner.

What You Need Approach

Perhaps the most common way to determine your house selling price is to look at your personal finances. Ask yourself:

  • How much do I owe on the mortgage?
  • How much will I spend in closing costs?
  • How much did I spend getting it ready for the real estate market?
  • How much will I pay my realtor or home staging professional?
  • How much do I need for a down payment on my new home?

In most cases, your goal is to walk away from the sale of your home with sufficient proceeds to cover all the above expenses. If you can also cover moving expenses and put a chunk of money into savings, even better. This approach helps you determine the lowest home selling price you can afford without losing money on the transaction.

What You See Approach

The problem with sticking to the first approach when selling your home is that it’s skewed to your perspective. Although no one wants to lose money on the sale of their home, a house selling price higher than comparable homes in your area can scare away potential buyers. To avoid this problem, take the time to learn about your home’s competition. Either with or without the help of a realtor, you can determine your home’s price ceiling by researching:

  • Amenities available in comparable homes for sale
  • Current foreclosures
  • Length of time recently sold homes were on the market
  • Price points of comparable homes for sale and already sold
  • Vacant homebuilder inventory.

Each home sales factor plays its own role on the marketability of your house; however, knowing what comparable homes with the same amenities are also on the real estate market will give you an idea of how high you can set your price. Remember, when all things are equal between two properties, the lower of the two prices may be the first home sold.

What Experts Say Approach

Depending on your area, the maximum and minimum acceptable house selling price can span a wide range. Set your price too high and your house might sit on the market for months, causing your to miss the opportunity to buy your dream home. On the other hand, price your home too low and you’ll sacrifice your profit. In this instance, consider talking to a real estate agent in your area for more accurate pricing information. Even though you’ll pay a fee or a percentage of the sales price, your agent can help you command a higher price with a more in-depth analysis.

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