How to determine the sales price of your home
Even though Colorado is a seller’s market, it’s important to be careful when selling your home. Making sure to price your home accurately is a great way to get people’s attention. More importantly, it will draw people who are ready and able to buy your home.
Get a home valuation
This is the most important step in determining the price for your home. Have a licensed broker perform an official market analysis for your home, determining its true market value. This analysis includes a variety of factors, including the age of your home, structural problems, and extra features it might have. The selling prices of similar homes in your area may also be used to help determine the final cost in the analysis. However, these prices might not equal your resulting value.
Home valuations are not the same thing as appraisals, though both may be used to determine the sales price of a home. Appraisals are far more detailed than home valuations, and the home may not end up selling for the appraisal amount. They’re based on several different types of value, and can be based on one of three cost approaches. Appraisals are sometimes required during the sales process, and always have an attached cost. Home valuations can often be obtained for free, however. Check with local brokers to see whether they’re available in your area.
Let buyers raise your price
When you get a home valuation, use that amount to determine the price of your home. Even if similar homes in your area cost more, don’t give into temptation and raise your price to match it. If prospective buyers see the value in your home, competing buyers will be the ones to raise your price for you. In fact, the lower price may end up drawing even more buyers to your home to increase the competition.
If you price your home above its market value, you increase the chances of it lingering on the market. Especially in an active housing market, houses that stay for sale for too long can develop a reputation. People may start to think there’s something wrong with the home, and realtors may focus on other properties. Trusting the home valuation, however, will make this far less likely to happen.