When You Price Your Home, Know What it’s Worth

When you decide to sell your home, one of the most challenging decisions is setting the right price. If you price your home too high, you won’t generate much interest and your home could sit on the market for months. Too low, and you could loose money. Consider your pricing strategy and make sure you have a realistic idea of what the home is worth.  

Know What Your Home is Worth

Don’t assume your home is worth what you paid for it, or what you owe on the existing mortgage, or even what the tax assessor says your home is worth. In order to properly price your home, you’ve got to know the current market value of your home. A good real estate agent can put together a Comparative Market Analysis, or CMA, to tell you what your home is worth relative to other home sales. Without an agent, you can get a decent idea of what your home is worth if you look at comparable sales in your neighborhood within the last six months.

How Much Time Do You Want to Spend Selling Your Home?

Realistically, if you price your home at its current market value, it will spend weeks or months on the market. Homes that aren’t a particularly good deal, financially, must make an emotional impression on buyers, so you might be waiting a while for the right buyers to come along.

If you’re determined to sell your home quickly, the best strategy is to price it slightly below market value. It could cost you a few thousand dollars to price your home low, but it will generate more interest in your home. Assuming that everything is in good shape, you shouldn’t have much trouble attracting buyers with a below-market price. The key is to avoid pricing your home too low, or buyers will wonder what’s wrong with your home and may be reluctant to make the purchase. $2,000 to $5,000 below market value is a fairly safe range, and should generate plenty of interest in your property.

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Steve SchraderBachar is a local mortgage planning expert who resides in Iowa and provides service to the clients of his mortgage planning practice across the Midwest.  You can reach Steve at 1-515-289-4381 or 515-360-5197.