Setting a listing price for your home involves a lot more than just writing down what you think it’s worth. There’s a lot that goes into determining the best price – one that will help you sell fairly quickly while at the same time getting you the most money possible.
The process is both art and science, but there are some fairly standard procedures, pricing formulae, and influencing factors that agents use and take into account.
It’s not as simple as checking your Zestimate and calling it a day. Stop. Doing. That.
Real estate agents understand that the price you set will have a direct impact on not only the number of people who come to view your home, but also how quickly it will sell. This is why many take a lot of time in putting together the ideal listing price (or, at least, they should – we certainly do at NextHome Titletown RealEstate!) They also spend a lot of time explaining the pricing strategy to their sellers.
In this post, we’ll explain how real estate agents highlight things they consider along the way in determining the listing price for your home.
Overview of Listing-Price Determination
The main points to keep in when it comes to determining listing price are:
- A comparison of your home with similar nearby and recently sold homes
- The current competition in the local market
- The different prices from different agents
- The general trend and direction of the local real estate market
- Finding the optimal price to create demand and interest in your home
It’s important, then, to understand how Boston agents typically arrive at a price for your home.
The primary pricing tool agents use is a comparative market analysis (CMA). The CMA results will outline the proposed listing price and allow you to understand the reason for that particular price, as well as providing the basis for a marketing plan.
Once serving as fairly simple write-ups of property comparisons, CMAs are now lengthy and complex, having been generated through the use of specialized software and analysis. They typically show average and median sale prices, price adjustments, local minimum and maximum sale prices, days on the market, individual closed sales, homes that were listed but did not sell, the best time to sell, the impact of overpricing, and intangible factors that agents know about the local market.
Still, there are other things your agent will take into account in determining the price. And that’s why proper pricing depends on agent experience and resourcefulness as much as it does plugging figures into the CMA software. You can find out more about what goes into it by calling us at (617) 657-9811.
The Four Factors That Influence Listing Price
There are a host of factors that can influence how you should price your home. But the ones with the most impact are the comps (the results of the CMA), location, condition, and updates.
COMPS / COMPARATIVE MARKET ANALYSIS RESULTS
In simplest terms, this is a comparison of the prices of recently sold houses that are very similar to yours and in close proximity to yours. It also includes your current competition – that is similar homes in the area currently for sale and their time on the market.
For the CMA to be an accurate tool for determining listing price it must take into account homes that are very like yours with respect to condition, age, features, number of rooms, square footage, and so on. These homes also have to be close, ideally within the same neighborhood. And they have to have sold recently, ideally within the past six months at most.
After running the comps your Boston agent will have a fairly good idea of what the listing price should be. But there remain other things to factor in.
THE PROPERTY LOCATION
If your home is located close to important amenities, it will likely sell for more than very similar homes that aren’t as close to those amenities. Proximity to things like good schools, entertainment, and dining will make it more desirable to buyers, and your agent will use that in determining listing price.
Other location-related factors include whether your home is situated on a busy street or a quiet cul-de-sac, as well as crime rates for the area and the location’s economic outlook. Your NextHome Titletown Boston real estate agent will look at all these when coming up with a listing price.
THE HOME’S CONDITION
Because no two houses are exactly alike, your home’s condition will also play a role in pricing. If your home is in better condition than the comparable homes used in the CMA, you can set a higher list price.
In fact, buyers have been known to pay up to $15,000 more for a home that is well maintained and in excellent condition. So with repairs and refurbishments, a good roof, and a top-notch HVAC system, you can typically list your home at a higher price. Some buyers are looking for turnkey, and those who are will be willing to pay a premium. To find out how to prepare your home in this regard, contact your agent.
Similarly, your real estate agent will also take into account any updates when determining listing price. Updates – whether repairs, upgrades, or a major remodel – will definitely impact your home’s value in a positive way.
Unfortunately, not all updates will allow you to list your home for much if any more. Some updates simply yield a better return on investment at sale time.
(Hint – Kitchens and Bathrooms!)
So if you’re considering some updates or upgrades prior to listing, be sure to consult your Boston agent first.
Why You Need a Good Agent to Determine Listing Price
Certainly, you can determine a listing price yourself, but should you? Of course not. Zillow is wildly inaccurate, so if that’s what you’re using, stop.
Remember, pricing right is often considered the best marketing tool – the one that can get you a quick sale at a good price. And determining the right listing price usually takes a lot of experience, skill, and intuition. If you want to get your listing price right with the assistance of a good Boston agent, contact us at NextHome Titletown Real Estate today at (617) 657-9811.
Boston and Beyond – Just Hit the Market!
The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.