How Much Can I Sell My House For? Home Pricing 101
Andrew Dehan5-Minute Read
December 24, 2020
It stands to reason that, when selling your home, you want to get the most money possible. Closing with a great price is every seller’s goal. How much you can sell your house for depends on a lot of factors. Working with an experienced real estate agent can be well worth the money. They will know the market, making sure you get top dollar for your home.
This article will break down the common terms and go through what to think about when pricing your home.
Listing Vs. Selling Price
Your listing price, also known as the asking price, is the price you put your house on the market for. The selling price is what you and the buyer agree the house will sell for. The difference between what you list your house at and what it sells for can vary widely.
If you list your house in a buyer’s market, it’s likely a buyer will bid below the listing price. The longer your home is on the market, the more likely a buyer will bid low.
On the other hand, if the market is competitive, buyers might bid over the listing price. This can result in a bidding war, with the house selling well over the listing price.
Bidding wars occur in highly competitive markets. They’re when multiple bids come in on a desirable house, and the buyers are trying to outdo each other with better bids.
There are many strategies you can take to encourage bidding wars for your home. One big strategy is to make your home more appealing by cleaning and staging it for viewings. Hiring an experienced real estate agent will also help you encourage a bidding war. They’ll know how to price your house competitively to get an influx of bids.
If you’re successful in starting a bidding war by listing a great house in a competitive market, the selling price of your home could be higher than the price you listed it at. You could also receive more attractive bids, like cash bids or bids without contingencies.
If the market is slow or your listing isn’t bringing in bids, you’ll want to consider cutting your price. Working with an experienced real estate agent will help you know when a good time is to lower your price.
It takes longer to sell a home in some markets. Research the average time on market for similar homes. If your listing isn’t getting any bites after a significant amount of time, you may need to lower your listing price.
Know with a lower listing price and a long time on market, buyers may bid even lower. This could make your selling price much lower than what you originally listed the home for.
How To Price Your Home
There are several factors that come into play when determining your listing price. Working with an experienced real estate agent can help you balance the different factors and get the most money for your home.
You’ll want to address these topics:
Check The Estimated Market Value
You need to check the estimated market value of your home. Rocket Homes℠ makes checking the estimated value easy by providing you access to a customized property report.
All you must do is enter your home address and we’ll give you an estimate of how much it’s worth, how quickly it will sell and the market conditions in your area. We’ll also show you what comparable houses in your area sold for.
Get A Comparative Market Analysis
A comparative market analysis is essential to pricing your home correctly. Your real estate agent should prepare your comparative market analysis by looking at similar homes recently sold near you. They will weigh several aspects of these homes against your home. These aspects include:
- Local listings
- Square footage
If you want to steer away from ultra-low offers, consider using price banding. Price banding sets a floor on what bids you will regard. This would deter non-serious offers for your home.
Use Century Figures
Century figures are those nice, round numbers. The idea is buyers are more attracted to a number like $150,000 than $148,256. Rounding up with an easy-to-read number could help you attract more bids. The psychology of this is that people prefer round numbers, even if they’re slightly higher.
Consider Online Price Ranges
When pricing your home, look at the price brackets in online searches. Most people have a price range they’re considering home in. For instance, if a buyer is searching for homes in the $180,000 - $200,000 range, pricing your home at $201,000 will exclude it from the search results.
Be aware that people are searching for homes in price brackets and pricing your home slightly lower or higher can filter your home out of the search.
Look At Market Conditions
Before listing your home for sale, you need to look at your local market conditions. Think about these factors when pricing your home to list:
- Seasonality: The housing market has ups and downs depending on the time of the year. Traditionally, spring and summer are the busiest times for sales, with things slowing in the fall and into winter. If you can control when you sell, listing while the market’s hot may get you more money.
- Neighborhood competition: Look around at other houses for sale in the neighborhood. How does your home stack up? Are there any improvements or small projects you can do to make it stand out?
- Buyer's vs. seller's vs. neutral market: The housing market goes through periods of favoring buyers or sellers. A buyer’s market is one where there are plenty of homes to choose from and many can be had below listing price. A seller’s market is the inverse, where demand for homes is high, but supply isn’t meeting it. Your market could be one or the other, or somewhere in the middle.
Calculate Your Margins
When pricing your home, you need to take seller costs into account. Here’s a short list of what you should factor in while pricing:
- Real estate agent fees: Typically, sellers pay the commission of both the buyer’s and seller’s agent at closing.
- Staging and prep: How much it’s going to cost to dress up your home to impress potential buyers. These could include updated decorative touches like curtains, paying someone to clean your home and fresh flowers throughout the home.
- Seller concessions and repairs: Depending on the bid negotiations, you may have to pay for repairs or improvements to the home at the buyer’s request.
- Transition costs: It can cost a lot to move, especially if you’re moving long distance. Factor in the cost of movers, boxes, renting a trailer and if you’ll have to pay for storage.
- Closing costs: Along with paying the agents’ commission, you will need to pay other fees. These can include title insurance fees, escrow fees, attorney fees and more.
- Mortgage payoff: When you sell, you must payoff your existing mortgage amount. This is usually a small part of the process. However, if you’re selling for less than what you owe, you will have to payoff of the remainder.
Finalizing Your Home Price
As you can see, there are a lot of parts to determining how much to sell your home for. This process is made much easier with an experienced real estate agent. Since they work on commission, they’re incentivized to make sure you get the best selling price possible.
Take the guesswork out of pricing your home. Find an agent to get an expert opinion and figure out the best listing price.
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