pricing

What You Need to Know About Researching Home Prices

When it’s time to sell your house, you may be feeling a little anxious. A chapter of your life is closing. There’s a lot of money on the table. You may be thinking “Is my house priced too high?" "Too low?" "Am I leaving too much money on the table?” These are big questions.

Luckily, you have a few resources at your disposal to figure out where your house stands among the crowd: a listing agent’s expertise and guidance, plus online property sites to get insight into the market.

So take a deep breath. Then do your homework. The more you know, the more confident you’ll be when it’s time to make those big decisions. 

Turn to Local Experts — Because They Really Know Their Stuff

The good news: Local market info is freely available online, so you, the seller, can get a sense of what your house is worth.

The bad news: Local market info is freely available online, so most buyers will also have a general idea of what they think your home is worth.

When pricing your house, a listing agent has your back in a way an online property listing site just can’t. An agent:

  • Has real world experience in your community. 
  • Knows the nuances of your neighborhood’s micro-market. 
  • Can expertly assess how your home compares to similar ones recently sold in your area.
  • Can tour your property to determine, inside and out, where your house fits in the real estate landscape. 

A website will do none of the above. 

An agent will, yes, consider online market data to help you set the price of your home. But he or she will also rely on first-hand knowledge about your home’s unique perks (and quirks), as well as about the neighborhood, to better inform your listing price. 

He or she can also recommend ways to market your house (Instagram-able photos, blog-worthy descriptions, etc.), pro stagers who can set your home up to dazzle buyers, and inspectors and contractors who can make any needed repairs.

That being said, you’ll want to have your own sense of what your house is worth too. As invaluable as a listing agent is to your selling journey, being the seller means you’re also the final decision maker. 

So keep your laptop out. We’re going to do a little research.

Search Online Property Sites — Because They’ll Give IRL Experience Some Context

Millennials are the largest group of home buyers today, according to a NATIONAL ASSOCIATION OF REALTORS®’ (NAR) report, and they overwhelmingly start their buying journey — where else? — online.

The internet is there for you as well — to an extent — when you’re ready to sell your home. 

Online property sites like realtor.com can give you a sense of local real estate trends, including your city’s median listing price, median closing price, and the average price per square foot. As you search, there are a couple important things to do:

  1. Pay attention to houses in your area that are similar to your own in terms of size, attributes, and location. When you work with a listing agent to price your home, these houses will provide the main criteria for setting the amount. 
  2. Take notes about {{ start_tip 101 }}what makes your house different{{ end_tip }} from the pack. As you look at online listings, think carefully about why your house is worth more or less than similar houses in your community. The better you’re able to articulate these nuances to your listing agent, the better prepared the agent will be to list your home at an accurate and competitive price. 

Having this information can also give you confidence in the price your agent ultimately recommends — you’ll know what’s standard for the market, and how the price determined for your house lines up. If there are discrepancies, talk to your agent about how he or she arrived at their price. Unlike the internet, he or she can give you a complete picture of what your home’s price should be and why. 

Also, as you search, be aware that not all real estate listing sites are created equal. Realtor.com® aggregates listings from Multiple Listing Services (MLS) around the country, which provides the most up-to-the-minute data about home sales. (By the way, realtor.com® is the official listing site of NATIONAL ASSOCIATION OF REALTORS®, which operates HouseLogic.com.)  Most of 'for sale' listings at realtor.com®, for example, are refreshed every 15 minutes — so what you see is likely what you get. Another big property listing site (and brokerage), Redfin, also aggregates data from MLSs.

Trulia and Zillow, on the other hand, collect their listing information from a variety of sources, and may not always be as up to date as the MLS. 

The takeaway: Seller, beware. Consider your online source. Take what you’ve learned from online listings to your agent to talk about what’s really best for you and your home. 

Related Topic: Sell a Home: Step-by-Step

Try Online Price Calculators — With Caveats

As long as you’re on the internet, you might decide to try an online home price calculator. With these calculators, property sites use sale prices near you (and overall market data) to approximately predict your own home’s value.

You’ll find an online home price calculator at almost any property site, and they all work a little differently. Realtor.com®’s home estimator tool, for instance, factors in your home’s square footage and recent home sales in your area to calculate an approximate recommended sale price.

Plug your ZIP code or address into a site to see:

  • Homes for sale in your community, which can give you a sense of the overall market
  • Estimated prices of similar homes in your area, which can provide a general range of home prices in your area
  • Property descriptions and photos of local homes for sale, which can give you a feel for how other homes are being marketed to buyers (and how you can do even better)

Info like this is good to know — particularly because most buyers will see similar numbers when they to online research, too — but you have to take what online home price calculators tell you with a grain of salt.

Online price calculators can be useful as a reference, but they have limitations in terms of their scope (they can’t read nuances of the market like a human can), as well as their reliability. Some, including Zillow’s Zestimate tool, which estimates market value, have been challenged by some users for inaccuracy.

Your listing agent’s knowledge and expertise are more reliable measures for determining your own home’s price — he or she knows the subtleties of your home, neighborhood, and real estate market inside and out. Before you and your agent can confer, don’t get your heart set on a sale price.

Speaking of: The sale price is one thing. Potential profit is another.

How much money you’ll pocket after selling your home depends on a number of factors, including the amount of debt you still owe on a current mortgage, property taxes, and your real estate agent’s commission. To get an idea of your potential profit margin, use a net proceeds calculator, like these from United Heritage Credit Union or Oklahoma’s Credit Union. 

Again: These are only estimates. A lot of variables are at play between the time you set a sale price and the time you close. The home will be appraised and inspected, and those results could affect your out-of-pocket costs or the sale price. And you’ll likely be negotiating the price with buyers. So use a net proceeds calculator with some care.

OK, you’ve done your research. Now it’s time to find that listing agent who’s right for you.

 

Visit www.houselogic.com for more articles like this. 

Copyright 2018 NATIONAL ASSOCIATION OF REALTORS®

 

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    6 Ways to Lose at Negotiating a House Price

    By: Leanne Potts

    Real estate negotiation tips so you can buy your dream home — and not overpay.

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    You've looked at enough houses to fill an entire season of House Hunters and finally picked one to buy. Now you're ready to make an offer.

    Your agent can help guide you through this nail-biting phase of negotiating a house price, but ultimately, you call the shots. Here's how to negotiate like a boss.

    Fail #1: Thinking House Price is All That Matters

    That house with a price point $15k below your budget? It may seem like a deal — until you add on the costs of maintenance and replacing the aging appliances.

    Planning on repainting, remodeling, or landscaping, too? Suddenly the price looks a whole lot higher.

    When developing your offer, calculate in the costs that will go above and beyond a mortgage payment. Then you can negotiate with an eye on the total cost of owning the house, not just the sticker price.

    On the flip side, the price may not be all that matters to the seller, either.

    She may have to start a job on the other side of the country in a month and value a quick closing. Or she may be looking to rent from you for a bit after the sale until her next home is ready. Sometimes being accommodating is negotiation gold.

    Fail #2: Refusing to Back Down on Small Repairs

    Before you draw a line in the negotiation sand over, say, a deck with some rotten boards, ask yourself if it's worth losing the house over a repair that would cost less than a thousand dollars.

    Say the house price is $250,000, which makes that deck repair less than half of one percent of the cost of the house. There's a lot of emotional energy at this point in the process, so give yourself a break rather than dickering over it.

    A house negotiation is not about winning for the sake of winning. It's about getting the house you want at a fair price on good terms.

    Fail #3: Waiving Formalities Because You're So in Love With the House

    Don't be so blinded by house love that you do something silly like skip some of the formalities of home buying, such as the home inspection or the appraisal, in an effort to close the deal.

    Those steps, and others like a termite or septic inspection, are known as contingencies. They're there to protect you from ending up with a six-figure money pit.

    Imagine how quickly the house-honeymoon would end if you found a termite colony or that the identical house across the street sold for much less?

    Besides, if you're taking out a mortgage, your lender won't let you skip an appraisal because they don't want to loan money on a house that isn't worth the loan amount. So even if you want to make it easy for the seller, your lender may stop you.

    There are other ways to sweeten your offer and get that house:

    • Pay some of the seller's closing costs.
    • Offer a fast close.

    If this is your first house, speed is an ace up your sleeve because you can move faster than someone who can't buy a new house until they sell the old one (another type of contingency).

    And remember, while there's a lot of emotion tied up in choosing a house, it's still a business deal.

    Fail #4: Getting Hung Up On a Few Grand

    You offered $198,000. The seller won't budge from $200,000.

    Before you walk away, consider this: Two grand is a lot of money, but in the house-buying world it's not so much. At an interest rate of 4%, with 20% down on a 30-year mortgage, that additional $2,000 will add just $8 a month to your payment.

    If you can swing it -- maybe you can cut a small thing out of your budget each month -- it could be worth it. 

    Fail #5: Folding Because the Inspection Turned Up Issues

    A good home inspection is going to turn up something. Usually several somethings. That's good. It means the inspector is doing their job. It's a rare day when a home passes inspection with no problem at all.

    Plus, many things that turn up on an inspection are easily handled. You can ask the seller to do the repairs or knock some off the price so you can pay for repairs.

    And while some problems may seem scary at first, like a roof leak or plumbing problem, they're almost always fixable and negotiable.

    Fail #6: Offering Less Because the Decor is Hideous

    The faux-Tiffany swag lamp and trippy orange-and-brown wallpaper make your eyes itch. So you're planning on offering less — way less.

    Before you do that, know the market. If it's a seller's market, your offer may be seen as an insult especially if the home's in good shape. And just like that, you've lost your dream home.

    When you're ready to make that offer, look past the little stuff that you can easily change, and focus your negotiations on what matters, like the location and the bones of the house.

    *********************************************************************

    6 Ways to Lose at Negotiating a House Price -  https://www.houselogic.com/buy/house-negotiating-closing/negotiating-house-price/

    By: Leanne Potts  |  Published: July 12, 2018

    Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

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