There are a lot of different factors that go into the accurate pricing of a house – some you can control, others you can’t.
Asking too much may cause the home tosit on the market, which can lead to people assuming that something’s wrong with the home. Price the home too low, though, and you’re pulling money out of your own pocket – never a sound financial decision.
So how are you supposed to find that target price that will attract the right buyer and successfully complete the sale?
Upgrades and repairs
The condition of the home is a big factor – buyers are concerned with how much work they’ll have to do when they move in.
Damaged sheetrock, old carpet and other problems will definitely influence what buyers are willing to pay. Also, if your air conditioner dies and you have to drop a few grand on a new unit, you will probably not recover that money at closing. But have you ever tried selling a home without a working A/C in Texas? You might lose even more.
Upgrades or changes that you’ve made can also affect your asking price. Some projects have a higher value at resale than others. Kitchens and bathrooms typically do well, as do energy-efficient features. On the other hand, removing part of the wall to install a built-in fish tank probably will not translate into a higher sales price, but it will almost certainly decrease the pool of interested buyers.
When it comes to fixing or updating a house, just know one thing: cost does not necessarily equal value.
The number of bedrooms and bathrooms usually plays into the selling price, as does the overall size of the house. More bedrooms, bathrooms and square footage typically translate into a higher sales price. Features like pools, hot tubs and work-out rooms seem like attractive attributes, but i may or may not actually add value.
Youre out of control
When you’re developing the asking price, you should understand that much of it depends on circumstances you just can’t control – like inventory or other listing trends, local employment numbers, interest rates, the amount your neighbor’s home sold for, and a host of others.
You also can’t do anything about your property’s location … and location is perhaps the biggest word in real estate. The location of a house includes access to hospitals, roads, public transportation, highways, restaurants and retail outlets. It also affects the commute for a potential buyer. A property with an attractive view or abutting a public park will likely command a higher sales price than a similar house down the street without those attributes.
What doesn't count
Unfortunately, the amount you paid for the house doesn’t matter. What you need to get out of the sale doesn’t matter, either – your buyer doesn’t care that your dream home is attainable if you’re able to squeeze another $15,000 out of your current sale. Sorry.
Get expert help
With so significant financial consequences to getting this process wrong, it’s in your best interest to ask a Texas Realtor for help.
In many cases, your Texas Realtor will develop a comparative market analysis (CMA), which compares your property to similar, recently sold homes. This is a time-tested way of getting an asking price in the right ballpark. Of course, each home is different – and that’s where a Texas Realtor can really clarify and fine-tune the pricing process.
What really matters
Even with all these considerations, the sales price is determined by one thing, and one thing only: A house, like any commodity, is worth exactly how much someone will pay for it.
For more real estate tips, news, and information, I encourage you to visit TexasRealEstate.com. For your real estate needs, contact RE/MAX Genesis at 830-833-2000.