Pricing: How Do You Figure It Out?
Pricing a home is not an exact science. I know that isn't hard to believe when you look at any Real Estate website and see all of the "price reductions" or "improved pricing". However, it isn't that hard either. In this blog post we outline the basics on how a home get valued.
1. Start With the Heated Square Footage
What I am about to tell you doesn't make sense to most people, heck even us, but it's just the way the system is setup. The basis for your home's value is home many heated square feet it has. Yes you are correct, this doesn't take into consideration: lot size, garage, pools, luxury items, etc. It is like selling your car by the pound, it makes no sense. However, it does give us a base line to compare your home to other homes in the market. A professional REALTOR will take in to consideration niche items that make your home more desirable to potential buyers and thus giving you a higher value. It's one of the small things that make us better than pricing robots.
2. Look At The Neighborhood
The best comparable homes tend to be right next door. So we always start with the houses in the neighborhood, not only because they are close, but they are usually the same size. It's not often that 5,000 sqft houses are built next to 1,000 sqft ones. "Birds of a feather flock together", right? Also, the reason it's important to start there is because some neighborhoods are more desirable than others, and the only way to find that out is to look
3. School Zones
We aren't talking about which schools are good or bad, we are talking about their geographical boundaries. Beyond neighborhoods, Elementary School zones are the next smallest area. We also find that if people are wanting to be zoned for a certain school zone, they will look anywhere in that zone for a home that meets their criteria. If we don't find enough comparables with in the Elementary School zone we will expand to Middle School and then High School if needed.
4. Niche Locations
There are good niches and bad ones. We aren't here to judge which are which, because if we have learned anything over the past decade plus years, different people like different things. Some things to think about...Is the house on a busy road? Is it on water or a mountain? Does it have good views like natural areas or a water tower? These questions are what REALTORS look for when pricing a home. You can't compare a home that is on a lake with one that isn't. I mean you could, but it wouldn't bring you the same results.
When it's all said and done pricing isn't an exact science. Make sure to review all of the facts, consider all of the comparables and extreme circumstances and go with your gut. If you are presented with a price that you think is too high, trust your gut, you are the buyer you are looking for.
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