Before I ever go to a listing presentation I typically know more about the house than I should. Meaning, I have done a TON of research on what the home is worth and have a pretty good idea at what it is going to sell for. This doesn’t mean anything.
Why, you might ask? Because it’s not my decision on what the house is going to list for. It’s up to the seller. I may give a suggestion, usually a range between 2 prices, but ultimately it is the sellers decision what the property is listed at. It might be around what I was thinking or it might be extremely high, typically the latter, so I have put together a way for sellers to come up with a realistic number for their home price.
First, find out every single home that has sold in your neighborhood and find the sales price. These homes are known as the comps or comparables and are vital to determining your homes price. A lot of sellers think this is all they need to do.
Houses are made in all shapes and sizes and two are usually not the same. They may be close but never the exact same so when I look at all the comps I first determine the four or five closest in square footage. If you don’t have four or five comps that’s ok, pick the closest ones.
Next, I look at the finishes. Did it have stainless steel appliances? Was it 4 bedrooms or 3 bedrooms with an office? Was there a pool? And especially in California, did it have a view? These are just a few questions I tend to ask but there are a ton of other physical factors that go into determining whether a sale is comparable.
The next thing to think about is what time of year is it? This can tend to play a factor because certain parts of the year have more buyers (demand) than others making the prices move around.
Lastly, what is going on in the world? The housing market moves and flows with what is going on with the world more so than people think. If the country is in turmoil the housing market feels its effect. When the country is prospering typically so does the housing market.
The information here is only a small snapshot of what actually goes into determining the value of a home but I wanted to give sellers a little bit of a heads up on what we, as REALTORS, are looking at when coming up with a price range for your home.