Purchase price is the #1 obsession for home sellers. Set the sales price too high and your house sits for months (years?) with no offers. Too low and you leave money on the table. Sellers often wonder, "What's a reasonable price for my house?"
Let's start with the bad news. No matter how hard we all wish it were so, here's what a fair price is not:
- It's not your appraised value from two years ago
- It's not your mortgage balance plus $20K of "profit"
- It's not what your new neighbor paid for the house next door
Even as sellers with hundreds of sales, we've made the mistake of mis-pricing a house more than once. And every time, we suffered the agony of a long and expensive vacancy. Finally, we learned to accept the harsh truth: Sellers don't get to determine the fair price for a house.
The good news? Buyers don't either.
Fair price is always — and only — set by the marketplace. It is a reflection of what a majority of willing and able buyers would pay, given the number of houses available for sale.
The problem is that you probably don't have a crystal ball to know what someone might pay in the future. So, the next best thing is to see what previous buyers have paid for houses like yours.
We understand that a list of recent sales is no substitute for a thorough market analysis that you might get from a real estate agent. And, raw sales data won’t take into account things like condition of the house (repairs needed or high-end upgrades done) or how long the house was on the market. But it can help you get an idea of what is going on in your neighborhood with today’s sales, and not what happened 18 – 24 months ago.
The following websites provide FREE information about recent sales:
So here's the tip: If the average time-on-market in your area is longer than you are willing to wait for your house to sell (5 months, for example), keep that in mind when you set your asking price. A lower sales price could mean a faster sale. And, if your house is vacant, a faster sale could mean a higher NET profit to you.
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