Pricing your home is probably the most gut wrenching part of the whole selling process. Price too high and no showings. Price too low and you get a quick sale but will always have that lingering feeling "Did I leave money on the table?"
The Golden Rule - Price it right the first time. You don't always get a second chance.
So how do you set your price? Before that, I would like to address a few ways how you do not set your price. First and foremost, the appraisal district is not an accurate indicator of price. After all, most of protest our taxes each year. Right? Another source to avoid are the Free Home Valuations sites. Since Texas is a Non Disclosure State, most of these sites do not have up to date or accurate info. Plus many of these sites are lead sources for realtors. Lastly, I would avoid asking a realtor who is trying to list your home. With a vested interest in selling your home we have seen agents skew the numbers for personal gain. Price it low = quick sale and quick commission. Price it high = butter up the seller to get the listing only to have them come back in 2 weeks telling you to lower the price. I am not saying all agents are like this but in 19 years we have seen enough of it to take note.
So how do you price your home? Market price is based on a number of items; current economic and employment conditions, interest rates, market trends and home sales within the last 3-6 months. Sales is the key word here. What has sold is much more indicative of value than what homes are currently listed for.
To arrive at a market value you have a couple options; a CMA (comparative market analysis) or a Certified Appraisal. Both are very useful tools. The CMA is performed by a Real Estate agent. Keep in mind agents are not licensed appraisers. The agent will review sales of similar homes IE size, age, bedrooms in similar neighborhoods. With this info they will offer a range of recommended price per sq ft. The CMA works well in master planned type neighborhoods. It will have limitations in a neighborhood with all custom homes or have large variances in age & size.
If the CMA does not provide a clear direction of pricing for you, you may want to consider hiring a licensed appraiser. The appraiser will come to your home for a more detailed look and to get an accurate measurement. The appraiser will look at the same sales trends as a CMA but will put more weight with regards to amenities, upgrades, trends etc. When the appraiser is done you will have a pinpointed price valuation
Both options are very effective. The CMA is typically free and can work well when there is no vested interest by the agent. The certified appraisal will also give you an unbiased value but will run $400 - $500.
Whichever direction you choose it is important to have some basis & facts regarding how you set your price. This will be crucial once you re on the negotiations process.
Pricing is not an exact science. Ultimately it is the market who will tell you if you priced your home correctly. And later on the lenders appraisal. Price too high and the phones don't ring.
Pricing is not static. You should gauge the amount of showings the first couple weeks. If you are not getting the desired activity we usually recommend an adjustment within 2-4 weeks. We at TexasFSBO.com / MyCastle Realty would be happy to discuss a pricing
Here is the best part - when you use TexasFSBO.com / MyCastleRealty.com to sell your home you are eliminating the 3-6% commission. This is real money you can use to price your home more aggressively or keep in your pocket!