Episode 13 | Correctly pricing your home

Want to get the most for your home sale? Of course you do…everyone does! In this week’s video we show you all the data points we use in helping our clients determine what price to introduce their home to the marketplace. This ensures that they hit the ground running and receive top dollar for their sale.

Step #1: Square footage and home style

Alright, so usually, the first place we’re gonna start is the size, (square footage), and that is both finished living area as well as any other unfinished storage areas, laundry, and then also the style of the home, you know, whether it’s a colonial, a split-level, split-foyer, but the square footage, the main thing we’re looking at is that livable square footage, what you can actually use, so we can compare that to other homes and where they sold at, but then also the style. All styles are not the same, and layouts can be different, just the home types. A colonial in general is going to sell for a little bit more than maybe a split-level, even if they are the same square footage. And then also just the flow of the home itself, if somebody’s maybe opened up the kitchen to the living area, that’s going have a better flow, and sell for more than a more traditional floor plan.

Step #2: Upgrades

Upgrades, you know, what does the home look like in terms of, if it’s a 40-year-old home, is the kitchen 40 years old? Or have they redone kitchens, baths, is the hardwood floor scratched or not scratched? What types of upgrades, and are they appealing upgrades? Are there ones that people are looking for in today’s market, do they seem current? So that really impacts a home’s value.

Step #3: Condition

And kind of in that same vein is the condition, so this isn’t just the upgrades but just what kind of general condition is the home in? Is the paint in good shape, in a neutral color? Is the floor in good shape, or maybe, do you need to replace the carpet? You know, if it’s an older home, are there maintenance items, are there things that need to be done with plumbing or electrical? So you know, general condition is just the feel that the buyer’s will get walking in there. Is it a well-maintained home and ready to move in, or are they going to have to do a bunch of work just to live in the home?

Exactly, and sometimes, condition is evident even before you get in the home. Are you driving up for curb appeal and you see a roof that obviously needs to be replaced? Or the yard is just overgrown? So just general condition impacts a property greatly, as does the lot.

Step #4: Lot

Now in terms of lot, around here, there are some people who want a flat backyard, they want a big lot, there’s some people who don’t want a lot of yard maintenance, but if you back to trees in your townhome, you’re going to get more for your home. Same if you back to a lake. Conversely, if you back to power lines, there are people who will pay less for that type of home, so we want to look at the lot, see how much it can add or subtract to the home’s value, and in some cases, it could be $5000 to $40000, depending on the type of lot that your home is sited on.

Step #5: Comps

The next thing we’re going to get to is the comps; these are the comparable sales. Similar homes that have sold, ideally in the same neighborhood, but definitely within a small radius, so that we’re getting a good idea of what those similar homes are selling for, and as we go through with these then this is going to be our data point to actually see what these homes got so we can base our pricing strategy off of that.

So comps are super important, but they’re a little bit of a look in the past, and it could be the more recent past and that could be the best indication of market value.

Step #6: Pendings

However, we also want to look at pendings. These are homes that are currently under contract, they haven’t sold yet, but let’s take an example of a house that was $500,000 and it sold at $500,000, and then we see a house that’s the same style, same photos, everything’s in the same condition, and it’s under contract at an asking price of $510,000, and it was only on for two days. So that lets us infer that if they were on for two days, why would they give up that much of their asking price? So maybe we can bump this house up a little bit in price. And even though we don’t know the sales price, we at least know the price they were at when they got a contract. We can also look at photos online and see how they compare.

Step #7: Inventory

And then also the inventory, this is essentially our competition. What other homes are on the market that you’re going to be competing with? The buyers that are looking at your home are also gonna be looking at others in the same price range, and this is important because you want to show that you’re a good value. If you’re priced $20,000 above the exact same home in your neighborhood, chances are that they’re will sell before you, so you want to take that into account, who you’re competing with and price accordingly, a little above, a little below, depending on these other factors that we already discussed.

And again, if a home just sold at a price where right now, there’s nothing like that on the market even in that whole zip code, well, maybe we can bump up our price a little bit just because we know there’s buyers in the market, we know demand is high, and if inventory’s low, we can try to nudge prices up.

Step #8: Staging

Staging is when you go through the home, how appealing is it, does it make you say, boy, I’d like to live like this? Or is it somebody’s old college furniture, are they using boxes instead of coffee tables? Is there dirty laundry all over the place? So you know, I think that’s something where people know that when they buy your home, they’re not getting that furniture, they’re not getting all that decorating, but all that decorating kind of adds up to a product that people say, I could live like this. So we can be super helpful in updating the way your home shows. If you need furniture, we can get it for you and if you have too much, we can help you know exactly what to edit and take out.

Step #9: Ease of showing

And then number nine here is actually ease of showing, and what this means is, how easy is it for agents and buyers to actually come through and look at your home? If you have very restrictive showings or appointment-only, and it’s tough for agents to get in, tough for them to schedule, or a buyer to schedule the times that you have, ultimately, that’s gonna lead to a lower sales price, so the easier that you make it for agents and buyers to actually get in and come through the home, ultimately, the higher you are gonna be able to sell for, so that’s something we do take into account when we’re pricing a property and putting it on the market.

Absolutely, so if you take all these things that we’ve talked about, add them together, we kinda have an idea of where we’re gonna be price-wise.

Step #10: Feel of the market

The last piece of this, we think of as our secret sauce, which is a team like ours, we sell 300 homes a year, it’s the feel of the market. How many phone calls are we getting? How many showings are we getting on our properties? And so can we bump it up just that last notch, or should we leave it go, knowing that if we’ve priced it totally right, we may get multiple offers? So I think, depending on the price range, this last feel of the market could be that last $2500 to $10000.

Exactly, so, if you found this useful, this information, or if you’re thinking about selling your home and you’re curious, what price point you’d be able to list it at, give us a call at 703-822-0207, we’d love to talk to you, and if you’re finding this content valuable, you’re liking our videos, please go ahead and subscribe right down here, we’d love to keep sending you valuable content. So thanks for joining us today, and y’all have a good one.

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