Times have indeed changed. Yesterday, we brought you the good news that Massachusetts set a nine-year home sales record - a feat that is a clear indication of the the real estate market's comeback. But, despite this piece of praise-worthy accomplishment, there are still properties out there that buyers find difficult to deal with. Why? Because of steep pricing issues. In fact, for many homeowners, pricing a piece of real estate is a moving target. There's no magic number for a home sale, but instead, a price range where your home has a good chance of selling quickly.
The definition of quick, or the length of time it should take for a home sale, depends mostly on the region. In urban hot spots like Boston, New York, and San Francisco, the norm is as fast as a couple of weeks, while 30 to 60 days is a healthy selling cycle in smaller cities or more rural areas. MLS reports that the average DOM for Bostonian properties is barely a month, 22.5 days to be exact. So, before you put your house on the chopping block, here are five ways to get closer to your spot-on price -- and one that will help your home sell in a timely fashion.
1. Take out emotions from your selling price
Even though you may think your home is superior to other properties in the area, it's important to take a neutral, unattached approach to pricing your home. That means disregarding that the house next-door is selling for more even though you have a nicer porch and a better view; or overlooking the money, time and sweat you put into remodeling your kitchen. Always remember that a home sale may not translate dollar for dollar.
2. Research earnestly, but cautiously
I'm sure that like many, you've also taken a peek at Internet sites to see how much your home or your neighbor's home is worth. But in spite of your snooping, there's been considerable skepticism about the accuracy of these values - especially ones that are posted online. Our Principal David Paez says that online price information could vary 20 to 30 percent from a home's actual value, especially amid a housing downturn - or in this case, amidst a selling spree. Some prices are inflated, mainly because of two reasons: the owner thinks the home can sell itself at that price, and the other is that the owner is trying to make the most of the situation; either way, these values could be different than what is posted online.
3. Calculate the dollar per square foot
According to real estate mega-site Zillow, figuring out the average price per square foot of homes in your neighborhood can be a starting point for determining your home value. However, we caution our clients that the price of your home could be "plus or minus 10 percent" from this rough estimate, though nowadays it's more likely that the situation calls for a "plus 10 to 15 percent".
4. Keep up with the Jones's
Walk around your block or building. Tour some sales in your neighborhood and take note of attributes such as size and number of bedrooms and bathrooms, included interiors, structural soundness, and amenities (a renovated kitchen, a finished basement, etc.). The most common pitfall of property selling is that you don't know the other circumstances in play, such as a motivated seller or the reverse, a seller who won't accept less and has the luxury of letting their place sit unsold. Make sure you also ask your agent or broker for insights into the seller, or the buyer, whatever the case might be. Looking into the motivations and circumstances of people you'll be dealing with is a smart and sure way to bring them to your side.
5. Factor in the days on the market (aka DOM)
Often overlooked by most property sellers are days on the market. This piece of real estate intelligence tells you how fast houses are selling in your neighborhood. If you need to sell your house more quickly than the average DOM, it's going to be necessary that you discount your price below other comparable listings in your locale. Be prepared to throw in a bar soap if you're rushing to throw out the towel. We always tell our clients that Patience is always an ally in property selling.
Some Brokers say that homeowners do themselves a disservice by overpricing -- a sky-high number that's not reflective of a home's size and quality will only turn off prospective buyers, and the longer it sits on the market, the more homebuyers question what may be wrong with it. On the other hand, homeowners may feel like they've missed out financially by going on the market with a price that's too low. That is not the case.
Finding a competitive price that's accurate and in step with market conditions, such as the economy, local job market, interest rates and inventory -- is imperative to home selling. In a healthy housing market, your properly-priced home is guaranteed to yield lucrative results.
6. Contact real estate agents for an estimate
Call up agents and brokers for opinions on the price of your home, and get a comparative market analysis, or a CMA, which tells you the prices of comparable, recently sold homes, on-the-market homes and homes that were on the market that didn't sell. The key, is having access to the "sold property" information that is only available through a broker. Though it's not an exact science, the CMA is a more precise way to hone in on the range needed to net a home sale.