When I come into your home for a price evaluation, I’m looking at many factors. I’m also competing with the opinions of my colleagues, your friends, the internet, Zillow, and what you have already determined your home is worth based on how much you ‘d like to net after the sale.
Pricing a home in an inexact science and often times sellers are enticed by the highest number he/she hears from any number of sources, some reliable, others not so much. The basket of gold at the end of the rainbow is undeniably attractive but it’s all very speculative and sellers should keep that in mind. What happens if you set your mind on this inflated number? It would be hard not to feel disappointed if you didn’t get it, right? But keep in mind, that price was likely always a fantasy. The bottom line is: no matter what you think your home is worth, the market sets the price. Not your real estate agent, not your parents and definitely not the magic number that Zillow has come up with.
There is a thoughtful process when it comes to determining the price for your home. A lot of times it depends on whether or not it’s a buyers’ or sellers’ market to gauge how aggressive one can actually get. Comparables (or ‘comps’ as they’re familiarly known) are an important factor and a good agent will do his homework prior to meeting with a seller and come equipped with the knowledge of what houses of similar size and age have sold for in the area. Comps are a good tool, however, used alone are unreliable because within the size/age category there are dozens of additional variables. What were the significant upgrades of these homes that sold? How many bedrooms/baths? What was the lot size? This is one reason why Zillow should not be used as an accurate assessment of a home’s worth. It hasn’t seen the inside or the infrastructure of a home- it’s based on what has sold in the area but the reasons behind these sales wouldn’t be taken into consideration.
Accurate comps are also better gleaned from a true neighborhood realtor, someone who knows what all the off market properties have sold for. Arm-chair real estate enthusiasts aren’t clued in to all the buying and selling that is done without a home ever hitting the market. But a neighborhood expert knows about them and these transactions all should be included when pricing your home, too.
It’s my opinion that a house should be priced competitively with what’s going on in the neighborhood yet attractive enough to incite a bidding war once it hits the market.
The only way you will know what the right price for your home actually is will be to witness how the public reacts once it hits the market. If an agent tells you that your house is worth a number that seems gloriously high, he may be using this as a tactic to get hired. Don’t be lured by an inflated value only to feel let down when you’re forced to reduce after no one makes an offer.