When you’ve crossed the finish line and sold your home, you want to revisit the process with no regrets. To move confidently into the next part of your life, you need to feel that you are selling your home for a fair price. So how do you know that you listed your home correctly and negotiated the best deal?
If you’re an Austin homeowner thinking about selling your home, you need to make sure you have a solid game plan in place to get the results you want. The Austin housing market has seen tremendous growth in recent years, but demand continues to change rapidly. Selling your home isn’t as simple as setting a price for it and looking at the bids, and you can’t just price your home based on what homes are selling in your area. Read on as we look at how to value your home and the importance of valuing it properly.
What is the price of my house?
When you start thinking about selling your home, it can be difficult to accurately determine the current market value. Typing a question into your favorite search engine will give you a good place to start: a home assessment tool.
These tools, such as those offered by Ready Front Real Estate, are one way to get an idea of the value of your home. They work by entering your home address and then generating approximate figures based on factors such as the selling price of homes in your area and the size of your home. It is important to remember that they do not provide a complete picture of the unique value of your home and some websites may use out-of-date data.
What is benchmarking?
Comparative Market Analysis, or CMA, is a tool used by real estate agents to estimate property values. It does this by pulling data from similar homes that have been sold in the same area as yours. The CMA may contain a description of your home and several other properties that have been sold in the same area. It also includes factors that affect the price of a home such as age, style, bedrooms and more. Basically, the CMA is an informal summary to help you get an idea of the local market and where your home is compared.
A good CMA will make price adjustments to properties that have recently been sold so you can easily see the difference between properties. Even in a house that has the right square footage, you won’t find two houses that are the same. Each property has unique characteristics that need to be considered.
How does a home appraisal work?
When your buyer buys your home on loan, the lender needs an appraisal. If your home isn’t priced right, you may run into problems with valuation and renegotiation or lose a buyer. It’s important to have the right complements to help with renegotiation so as not to lose a buyer – this is another case where it’s important to have an agent by your side.
The appraiser’s sole responsibility is to determine the value of the property by conducting an appraisal for the mortgage lender. Generally, appraisers use a sales comparison approach and compare the features of your home to other homes that have been on the market in recent months.
An experienced broker can be your advocate during the appraisal process. You can be there to meet the appraiser and make sure that the appraiser doesn’t do an appraisal of the car and they physically enter your home. While agents cannot perform appraisals or offer value advice, they can provide appraisers with information about your home and other relevant real estate information in the area they have collected in relation to your home. Ultimately, the appraiser determines the value of your home.
What are the benefits of working with a REALTOR?
By now you’ve gathered that a lot can go into pricing a home. It may be tempting to just price your home at the number a valuation tool gives you, but home values are often more nuanced. When you’re selling your home, you want to work with an expert to make sure you get the best return and capitalize on your home equity.
As the market shifts from a seller’s market to a more balanced market, having an agent that understands what is happening will help protect you from having your home sit on the market and you don’t have to reduce your price. Make sure an agent is attuned to the market, so that you are pricing correctly in a shifting market.
When pricing your home, a great agent will look at not just the square footage of your home, but they’ll also factor in:
• Current market competition
• History of houses sold
• Unique features that add value like a pool, updates, and more
An experienced agent will also be able to defend their pricing process to potential buyers, which helps protect you from low offers. Ready Front Real Estate agents have detailed data and market knowledge about their specialty areas. On top of all of these benefits of working with a real estate agent, you also get the marketing power of our brokerage to get your home seen by the right buyer.
What happens if I price my home too low?
Selling your home isn’t that different from dating—you don’t want to sell yourself short! If you price your home too low, you run the risk of potential buyers assuming something is wrong with it. You may think that pricing your home lower will cause people to bid on it, but that isn’t necessarily true. As more inventory builds in Austin, agents are seeing fewer bidding wars. You may end up getting offers below your list price, and if you accept, you could be leaving money on the table and hurting your purchasing power for your next home.
What happens if I price my home too high?
If you price your home too high, your home may sit on the market for longer. This can delay your plans and your anticipated timeline for selling your home. Another downside of pricing your home too high is that if you aren’t receiving offers, you may have to lower the price on your home. This is called a price reduction.
While there are a variety of home pricing strategies, testing a price is almost never a good plan, because buyers can read a price drop as a negative. While it is hard to say you won’t have to change your price as the market shifts, your agent will evaluate changes in inventory on a weekly basis until your home goes under contract.
Working with an experienced agent to price your home accurately is the best way to ensure you sell your home quickly and for the best possible return. Connect with one of our talented real estate agents today if you’re thinking about selling.