The most important factor when selling your home is to determine the price. You don’t want to overprice your home because buyers will lose interest after the first two to three weeks of showings. If you want to sell it quickly don’t worry about pricing it too low because homes priced below market value often will receive multiple offers, which will then drive up the price to market. It’s all about supply and demand.
Pull Comparable Listings and Sales
Look at every home that is similar in style and square footage that is or was listed in the same neighborhood over the past six months. This should include pending sale and sold homes. Pay attention to neighborhood dividing lines and physical barriers such as major streets, freeways or railroads, and do not compare inventory from the “other side of the tracks.” For example I live on deep water in Discovery Bay. You do not want to compare lake property to deep water property as the deep water property can be $200,000 or more in value. Compare like property with similar square footage, within a10% up or down from the subject property, if possible. e.g., your house is 2000 sq. ft., look in the 1800-2200 sq ft. range.
Adjust pricing for lot size variances, configuration and amenities / upgrades.
These matter only as they compare to your listing, but bear in mind that sellers can ask whatever they want.
To see what buyers will see, tour these homes. Make note of what you like and dislike, the general feeling you get upon entering these homes. If possible, recreate those feelings of reception in your own home.
These homes are your competition. Ask yourself why a buyer would prefer your home over any of these and adjust your price accordingly.
Make note of the days on market, which may have a direct bearing on how long it will take before you see an offer.
Examine the history of these listings to determine price reductions.
Pull history for expired and withdrawn listings to determine whether any were taken off the market and relisted. If so, add those days on market to these listing time periods to arrive at an actual number of days on market.
Compare original list price to final sales price to determine price reductions.
Compare final sales price to actual sold price to determine ratios.
Withdrawn & Expired Listings
Look for patterns as to why these homes did not sell and the common factors they share.
Which brokerage had the listing: a company that ordinarily sells everything it lists or was it a discount brokerage that might not have spent money on marketing the home?
Think about the steps you can take to prevent your home from becoming an expired listings.
Square Foot Cost Comparisons
Remember that after you receive an offer, the buyer’s lender will order an appraisal, so you will want to compare homes of similar square footage.
Appraisers don’t like to deviate more 25% and prefer to stay within 10% of net square footage computations. If your home is 2000 sq. ft., comparable homes are those sized 1800 to 2200 sq. ft.
Average square foot cost does not mean you can multiple your square footage by that number unless your home is average sized. The price per square foot rises as the size decreases and it decreases as the size increases, meaning larger homes have a smaller square foot cost and smaller homes have a larger square foot cost.