Pricing your home, Part One: Choosing a number

One of the most important aspects of putting your home on the market is deciding on a listing price. Too high, and you’ll scare away buyers while your property gathers dust on the multiple listing service. Too low, and well… you might sell quickly, but you might not get what you need financially out of the deal.

While you may not end up selling for the amount you list your house for, the price tag you choose can have a major impact on marketing your home successfully or unsuccessfully.

Getting to the right number

A lot of sellers start off trying to figure out the value of their home by cruising over to Zillow and checking out the “Zestimate” for their address. It’s a fun thing to do… but don’t rely on the number you find too heavily. The number you see is mostly based on what houses around you are selling for, but those other houses might be a totally different style than yours. One might have needed a new roof, while yours is fairly new. Or one is on a busy road while yours is on a quiet street.

The most accurate way to price your home is to compare it to other nearby properties that are the closest to yours in size, style and design. Obviously, if your house has two full bathrooms, it’s not likely to sell for the same as a house with four full bathrooms. But you also have to consider style — it’s best not to compare your ranch to the Colonial down the street.

Checking out the assessed value of your home — the dollar value your city or town values your property at for tax purposes — is another way to compare prices to arrive at your list price, although the usefulness of assessed values for market purposes can vary from community to community.

You could do a lot of this homework on your own using public records online or at your city or town hall. But a MUCH easier way to get to a good price is to grab what’s called a “comparative market analysis” from a real estate agent. Most agents will do these for free and with no obligation from you to sign up to work with them. (That’s how we roll, anyway.)

Here’s what the agent does: they do a deep dive into the multiple listing service (MLS), looking at homes similar to yours in size, style and design that recently sold or are currently on the market. The MLS puts all the info at the agent’s fingertips, so they can quickly cull out houses that are much bigger than yours, that have a garage or not, that have no backyard or a big backyard… whatever is most like your house.

After doing all this detective work, a good agent will share with you what they found and work with you to arrive at a price that seems fair to you and to potential buyers. It’s tempting to think as a seller that your home is super awesome and that you must be able to sell for much more than your neighbor did two months ago. But the truth is, buyers with agents will be doing the same homework you did with your agent. If they know your house is very similar to that home that recently sold, they won’t want to pay a premium just because you said so.

$500,000 or $499,999?

It’s just a dollar difference, but it can mean the WORLD on how many potential buyers will become aware of your listing. Why? Online searching.

When potential buyers are searching for real estate online, they’re often faced with a little search box that allows them to enter a price range for homes they want to look at. Whether your property fits into that range or not will determine whether or not the potential buyer will be exposed to your listing. And, since a lot of buyers find property online these days, that can make all the difference in finding a buyer.