I've seen it countless times over the years. A Tri-Cities homeowner wants to avoid paying a real estate agent's commission, so they go the "FSBO" route. That acronym is short for "For Sale By Owner." But because they don't know how to correctly price their home, much less how to negotiate a beneficial contract, they end up selling it for less than the home is worth.
A good real estate agent will use at least these four things when determining the right price to list a home for sale.
1.) The value of homes in your area
It's pretty easy to assume that your house should sell for "X" since your brother's house recently sold for that amount, and it has the same number of bedrooms and bathrooms. But pricing a home is more complex than that. Similar homes may sell for wildly different prices in Kennewick vs. West Richland. If you don't live and breathe real estate, you're not going to know the real factors that influence home value.
2.) The condition of your house
Many people think their home is in better shape than it really is. You've learned to live with those cabinet doors that don't close all the way. You don't even notice the way your wood floor dips from all the foot traffic at that busy spot where your kitchen and family room meet. But the buyer who's never been in your house before will notice these flaws, and it'll affect what they think the house is worth.
3.) Where prices are headed
It's not just the price of similar homes that can affect your home's value. If prices in your neighborhood are flat or declining, even for bigger or smaller homes, it'll impact the value of your home, too. The housing market is kinda like a living organism in that way. And again, if you're not active in the industry, constantly seeing the market's ups and downs, you won't know where prices are headed.
4.) Current buyer demand
Like any other product for sale, home prices are heavily influenced by the laws of supply and demand. As a homeowner, you don't have the luxury of knowing what buyer activity looks like in different neighborhoods, different price ranges, etc. As a real estate agent, I see and hear what buyer demand is like today and how it might be changing...and I use that to determine the right price to list a home for sale.
A big mistake we often see homeowners make when selling their home without professional help is assuming the list price doesn't matter. They think they can just pick any price that seems right and it won't matter -- the home will sell anyway! But the reality is that getting your list price wrong can have serious consequences. We'll save that for a future blog post.
- Cari McGee
