If you’re about to list a home, you know how challenging but important it is to determine the right price. You want the price of a home to be fair, but you also want to command top dollar for your property. With all of this in mind, how do you determine what price is right for your home?
Read on to learn the 7 things that impact the price of a home when you’re ready to sell!
1. The Size of Your Home Matters
With the average size of an American home increasing by 74% since 1910, it’s important to consider how your home stacks up. As logic suggests, you can probably ask more for a bigger home. But sometimes smaller homes with better finishings and updated appliances can be priced just as high, if not higher.
Understand the square footage of your home and consider using that as a factor in calculating the price. Be sure to consider the curb appeal and layout, too, since those factors will also affect the cost of your home. A home that is set back on its lot could fool a buyer into thinking it’s bigger than it is, so you might be able to distract potential buyers from focusing on square footage at all.
2. Neighborhood Prices Will Have an Impact
Another strategy is to look at comparable homes in the area to get a feel for how houses have been selling. It’s a common practice to investigate the prices of nearby homes in figuring out what is most appropriate for your home price. And it’s particularly important to find homes that have sold recently to get a better barometer for pricing.
If your home is the most expensive one on the block, you might be at a disadvantage relative to your neighbors. But if your home is a smaller home among bigger homes, that can enable you to ask more with your listing price. When in doubt, put time into investigating your surroundings so your listing price makes your home a competitive option.
3. Location, Location, Location
Is your home on the shores of Lake Michigan, or does it sit near a busy intersection? The location of your home is a critical consideration when it comes to selling a house. Homes with access to water features, panoramic views of the mountains, or vibrant downtowns will be able to command top dollar, even if they’re low on space.
And when it’s time to list a home, including high-quality photographs and videos are key to generating interest. When your home has a beautiful view outside the back porch, capitalize on it as a selling point — and use it to justify your asking price.
4. Interest Rates
The current interest rates will impact the appeal of buying a home, too. If someone can get a mortgage deal from a lender with a lower interest rate, they may be more eager to pounce on a house. And when the interest rates are lower, you may be able to notch up your asking price and get a better profit.
Understand the status of interest rates nationally at the time of listing. When the interest rates are higher, houses become less affordable for the average person — and you’ll need to set your price accordingly.
5. What is the Home’s Condition?
If your home hasn’t been updated in a few decades or needs a new HVAC system and roof, you will need to go lower with your asking price. Condition plays a big part in determining the value of a house and how much you can expect to ask for it. If you have some money available, look into what updates you can do to get the best return on the investment before listing the home.
And if your home’s not in the best condition, there still are ways to sell it quickly. Sites like We-Buy-Houses-For-Cash-in-Chicago.com can provide the money you want for a sale in a week or less.
6. Market Conditions Affect the Price of a Home
What is the housing market like in your area? Finding an answer to this question needs to be a priority since market conditions can sway the price of home. Talk to real estate experts and local officials to gain a better sense for how things are going in your local housing market.
If there are lots of houses for sale in the neighborhood, that can work to your disadvantage since buyers will have their pick of options. But if there aren’t many homes for sale, you’ll be much better off. You can charge a higher price since there will be more demand for what you’re offering, and you might even be able to start a bidding war.
7. The Economy
The national economy situation will impact pricing, too. While it’s easy to focus on the local situation when selling a house, don’t over look the national scene. When the economy is in good shape, you stand a better chance of finding people ready to buy your home.
What is the employment rate like, and how is the stock market doing? Ultimately, these questions can inform the type of price you set. As an example, if you’re selling a house during a recession, you may need to go lower on the price in order to find viable buyers.
Sell Your Home
When determining the price of a home, there are many factors you’ll need to weigh carefully. You want to maximize your profit potential, but you don’t want to turn away interested buyers. Do the research, look at the current market conditions, and set a price that will get your home noticed.
To find more useful tips on anything from real estate to tech, check back with us for fresh and informative articles!