The fluctuation in the market for home prices across the United States over the past decade has made it somewhat difficult for many realtors to price a home correctly. We have seen so many changes since the housing bubble of 2008 to the current rise in demand for real estate.
What is a home’s value, much less any other product? Anything a buyer will pay for it!
One of the best things an agent can do for a client is price their home correctly. When an agent and a client are on the same page, pricing a home correctly can be easy. The right price makes for a quicker sale and everyone happy.
A common misconception in real estate is that you should overprice your home, because in theory, prices can go down in the future, but they should never go up. This can be a horrible mistake.
It is important, as an agent, to get the price right from the jump. I never inflate prices to get a listing and at times may turn away clients who do not want to be reasonable. If the listing goes to another broker, that agent will end up asking for a price reduction and in the end the client will know the home was overpriced and it won’t work out for anyone. The longer a house sits on the market, the more leverage builds for a buyer. A buyer can now say there is no demand for the house and that it is undesirable and priced too high.
Today, information is so readily available that people are able to know what a home is worth before they’ve even seen it! So, for this reason, it’s never been more important for the price to be right.
Here is a reliable formula to accurately price a home the first time you list so your experience is as smooth sailing as possible.
1. Square Footage and Building Type vs. Land
The size of the home, the location and the size of the property are the first things to consider. Remember, land appreciates over time, not the structure! Therefore, a very expensive condominium or apartment will be worth much less over time than a smaller home with less amenities. Next, compare the square footage to other homes in the neighborhood. People typically want as much as they can get for what they spend. Go to your county tax assessor webpage to find square footages of homes to compare. In Dallas County, simply go to Dallascad.org.
Then, look at where the location of the house is. For example, a house in Preston Hollow is likely going to sell for a much higher price than a house in Lower Greenville. Both great areas. Zip codes tend to go in and out of trend, so it is important to be in tune with current market trends. When an area is trending, take note of which types of properties in that neighborhood are selling well. You can use my website to follow market trends by clicking here. Always, always consider paying for a better location, keeping in mind that over time it will be worth more than what you paid for it.
3. Luxury Amenities
Keeping in mind that technology typically becomes outdated within a few years, luxury amenities are not always factored in. Renovations like these can play a big role in a home’s final price. For instance, check out some of the luxury work performed by Solar Custom Doors & lighting and Ornare in the DFW area.
When thinking of renovating or upgrading a home to current trends with things like smart appliances, wine cellars, or a sauna, I say either go big or go home. Focus on major rooms like the kitchen, the master bedroom or the living room. Do it all or leave it alone and be sure to use legitimate renovation contractors like AMF Construction.
5. Interior Design
When done the right way, a good interior design alone can add tremendous value to a property. A bad interior design with outdated counters and tiles can really hurt a property and make a home feel overpriced. I suggest contacting Jenni Bishop to see how she can help.
With all of the information I just laid out for you, I hope you’re able to get a better feel as to how your home measures up in the current market. Of course, I would love to help you figure out what your home is worth, and when you’re ready to sell, get you the fairest assessment of a realistic price you can expect. Feel free to get in contact with me here.
If you’re looking to buy, this information can also help you consider different important aspects that would make a wise financial investment in a property that will retain, or even better, appreciate in value.