Setting The Right Price For Your House
Saturday, October 31st, 2009Is it possible to set too low a price for my house?
Pricing your House Realistically
In the current house market, many buyers may be tempted, especially if they need a quick sale, to make their house stand out by setting a very low price for it. But the old rule that: Houses sell at a price that buyers are willing to pay and that sellers are willing to accept, still applies.
Before you decide on a guide price, it is vital to find out what the competition are doing and price your house accordingly. Generally, if a house is set at too low a price, way below the competition, the seller should receive enough offers that will increase the price to its real market value. So there is little danger in pricing a house too low. The real danger lies in pricing it too high for the market.
If you price your house too high, it may be a long time before it sells and you will end up paying more mortgage payments than you expected, as well as having all the problems of trying to keep the house in top viewing condition.
Research Comparable Listings and Sales
If you want to sell your house, you must price it correctly and the more research you are prepared to do the better. Look at every similar house that was or is listed in the same area as your house over the past six weeks to 2 months. The list should contain houses within a 1/4 mile to a 1/2 mile and no further, unless the property is rural or there have been no nearby houses for sale.
Allow for the fact that perceptions and desirability have value. Be honest with yourself about the factors that increase or decrease values, such as the amenities (or the lack of them), the condition of nearby houses and the area you live in. In this way, not only will you set a realistic price, you will be more prepared for hard questions from prospective buyers.
Compare similar square footage and similar property ages, within 10% up or down from your property. Get as much information as possible on house sales in your area, especially on houses that were withdrawn from the market. Go around all the estate agents and ask as many questions as you need to.
Compare the original list price of similar houses to the final sales price to determine price reductions or increases. Adjust the pricing of your house, compared to similar nearby house that have sold, to allow for extra rooms, bigger/smaller gardens etc
Try to find out the lowest price that owners of similar houses to yours will accept. Visit similar houses that are for sale and see how your house, and its projected price, compares.
These houses are in competition with yours for buyers. Ask yourself why a buyer would prefer your house over any of these and adjust your price accordingly.