Tuesday, December 29, 2020 / by Breanna Thornton
The price of your home when it goes on the market is one of the most crucial factors of whether or not it will sell. The price point of your home will either attract buyers or cause them to look elsewhere. So what exactly goes into figuring out a price for your home? Here are eight factors that will be considered.
Image from Sheeba Magazine
1) Neighborhood Comps (comparisons)
By looking at similar homes in the nearby area that have sold recently, you can get a good idea for what amount is right. However, no home is the same. Different key factors can affect the price.
The location of the home is critical for a home value. Typically, quality of local schools, employment opportunities, and proximity to entertainment/shopping are evaluated when looking for a price.
3) Size and Space
It’s common for the price of a home to be broken down by price per square foot. This means that the bigger the home is, the more the price will go up (naturally). Not only is the size important, but how much of this space is “livable.” Garage space, attics, and other areas like that are not typically seen as livable space.
4) Age and Condition
The newer the home, the more it will typically cost. As homes get older, the condition of certain systems (such as electricity or plumbing) begin to decline and they are not worth as much. This is why it is important to have inspections done before coming up with a price.
5) Upgrades or Updates
A popular thing to do before putting a home up for sale is to update things in the home to make it more appealing. For example, a seller might put in new floors or redo paint in their home so that buyers feel like they are moving into a higher end home. These updates increase the value of your home.
6) Local Market
Every city will have a varying market depending on the supply and demand for homes in the area. If there are a lot of buyers and low inventory, you could get away with pricing your home a little higher since there is so much demand. However, pricing your home too high could deter any buyer, so talking with a real estate agent will be your safest bet.
7) Economic Indicators
Beyond the housing market, there are lots of factors that contribute to the economy as a whole. The levels of unemployment and job demand can also affect if people are able to buy homes or not. Taking a look at the economic conditions in your surrounding area will tell you more about how to price your home.
8) Interest Rate
Since interest rates are so low across the board right now, people are able to afford homes. Taking advantage of these low rates is crucial since more buyers are flooding the market.
The diagram below also gives some insight into pricing a home.
These factors just scratch the surface about what goes into finding the perfect price for your home. If you want a better idea of what goes into this process, contact us and we will help you! This is the perfect time to sell your home, and we would love to make this a smooth process for you. Happy New Year!
Facts from opendoor.com
Header image from dailymail.co.uk