Setting the Price for Your Home

Everything has value. Especially your home.

And when it comes to selling your home, assigning a price to that value is complicated. You made memories there. You’ve got a major financial interest in the place, too.

Buyers think of value, but they’re more concerned with price. And your home’s price is one of its most attractive — or unattractive — features. The right price can attract buyers, quickly. The wrong price may mean the house sits on the market, which can create the vibe among buyers that there’s something wrong it. (If the home buying process is Instagram, think of a wrongly priced home as a photo that isn’t getting any likes.)

It’s your agent’s job, as the real estate expert — mining his or her expertise and knowledge of the market — to determine the best price for your home. But it’s your house. You need to have your own idea of how much your property is worth. Here’s how to get it.

Work With Your Agent

This is crucial. Your agent brings the right mix of industry expertise and knowledge of your local market to the table.

To understand whether your agent is pricing your home properly, read through each of the steps below. Use what you learn about your home’s fair market price to evaluate any price your agent recommends.

Throughout the pricing process, a good agent will:

  • Listen to your needs
  • Take into account your research
  • Use his or her knowledge of the local market to help you pick the best asking price

You’re a team. It’s in both of your interests to price your home correctly — a timely, profitable sale is win for everyone.

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And Yeah, You Should Also Check the Internet

Pricing a home is both art and science. To understand what will inform your agent’s pricing decisions — and to be prepared to bring your own educated input to the conversation — start with a pricing research phase.

This includes taking advantage of online estimating tools — but only to an extent. Property websites like realtor.com® and Redfin enable you to plug in your home’s address to see approximately how much your house is worth. They base their estimates on your home’s square footage and real estate data they’ve collected, such as recent home sales in your local market.

But those results are estimates based on generalized factors, not your unique situation. If at any point the price you see in an online calculator doesn’t align with what your agent suggests, prioritize the agent’s advice.

Online estimators also have a reputation among real estate professionals for misleading buyers and sellers alike with less-than-optimal pricing information. But as a starting point, they have their utility.

Know Your Local History

What your home’s listing price should be largely depends on what similar homes, or “comps,” recently sold for in your area. To price your home, your agent will run the average sales prices of at least three comps to assess your home’s value.

What constitutes a comp? A number of factors, including a home’s:

  • Age
  • Location
  • Square footage
  • Number of bedrooms and bathrooms

Agents will look into the difference between each comp’s listing price, and the price it sold for. He or she will consider price reductions and why they happened, if relevant. All the while, your agent will also rely on inside knowledge of housing stock and the local market. That nuanced understanding is invaluable, particularly when measuring the unique aspects of your home with raw data about comps.

When selecting comps, agents generally look for properties that sold within a one-mile radius of your home, and in the past 90 days. They find these homes using the multiple listing service (MLS), a regional database of homes that agents pay dues to access.

Size Up the Competition

In addition to recently sold homes, your agent will also look at properties that are currently for sale in your area. These listings will be your competition. But because listing photos don’t always tell the full story, a good agent will check out these homes in person to see what condition they’re in and to assess how your home sizes up.

You can do the same. For additional perspective, you can also get in touch with your local association of REALTORS®. Ask if they have information to offer about your neighborhood and the local market.

Kansas City Real Estate Market Share

Understand the Market You’re In

The housing market where you live can greatly impact your pricing strategy.

If you’re in a seller’s market, where demand from buyers outpaces the number of homes for sale, you may be able to price your home slightly higher than market value.

But if you’re in a buyer’s market, where buyers have the advantage, you may have to price your home slightly below market value to get people interested.

You can see local market trends by checking the online resource realtor.com®. It offers charts that display important housing market data, such as a city’s average listing price, median sales price, and average days a home is on market. It’s a lot of information. At any point, you can ask your agent to help you make sense of how your local market will influence your home’s price.

Put Your Feelings Aside

As previously mentioned, many sellers think their home is worth more than it is.Why? Because memories. Because sentiment. Because pride.

But you have to stay objective when assessing your home’s value. Buyers, after all, won’t know your home’s personal history. What makes your home special to you may not be something that entices them. Read: They may want to convert that craft room you worked so hard to perfect into a man cave.

The lesson: As much as possible, set aside your emotional attachment to your home. It will make it easier to accept your agent’s realistic, clear-eyed calculation of its price.

Remember: It’s All Relative

As you and your agent are talking price, the local market may throw you a curveball or two.

In some markets, for example, it could make sense to price your home slightly below its fair market value to spark a bidding war.

Of course, there’s no guarantee a pricing strategy such as this will pay off. Similarly, there’s no one-size-fits-all playbook. Your home should be priced for its own local, or even hyper-local, market. Period. Confer with your agent before you decide to try any market-specific pricing tactics.

Be Savvy With the Dollar Amount

Pricing your home requires careful attention. In some cases, fair market value may not be precisely what you should list it for — and the reasons can be subtle.

For example, if comps show that your home is worth $410,000, setting that as your asking price can backfire — the reason is that buyers who are looking online for properties under $400,000 won’t see your home in search results in that case. This explains why many agents use the “99” pricing strategy and, for example, list $400,000 homes for $399,000. The idea is to maximize exposure.

Have a Heart-to-Heart With Your Partner

Not the sole decision maker in your household? Talk to your partner about your home’s price before it’s listed. You can use this worksheet as a guide for that discussion.

The reason isn’t just to foster the kind of open communication that’s important to any relationship. It’s that if you’re not on the same page about price or the other things that are important to you about sale, each subsequent step of the selling process will be impacted by that tension.

Keep Your Head in the Game

You’ve considered your agent’s advice, and the two of you have agreed on the right price for your home. Hey, champ! Your house is on the market.

Even after the listing date, price should be an ongoing discussion between you and your agent. Markets are fluid, so it’s possible that you’ll have to make tweaks.

In any case, it’s important to to stay in continuous dialogue with your agent, the MVP of Team Sell Your House. Together, keep your eyes on the price.

Curious to see what your home value is? Click here.

The Plaza Art Fair

Once again Fall is quickly approaching and the first thing that comes to my mind is The Plaza Art Fair.  This outdoor event takes place every September on the Country Club Plaza in Kansas City, Missouri.  Nine city blocks are blocked off and hundreds of artists booths and Restaurant booths line the streets.  The atmosphere is amazing!  Although the event is considered family friendly, a word of advice; don’t take your small children (especially strollers) on Friday evening. Friday evening is considered the kick-off event and the streets are lined with everyone from the young adults to the older ones enjoying adult beverages.  By 9pm, it’s extremely hard to move around the streets.  Don’t forget to check out the 3 Live Stages with local and national talents.  And wear your dancing shoes, you will need them!

 

My favorite part of the art fair are the restaurant booths!  The top eateries on the Plaza make special hand held sized portions of their main dishes for a great price.  A steak sandwich with herbed goat cheese and balsamic onions from The Capital Grille.  Yes please. Carnitas Tacos from The Oliver.  Sure.  Truffle Bacon Popcorn from Rye.  Hells yes. Did I mention all different types of local beer, margaritas, and sangria? The fact that you are able to walk around the streets of the Country Club Plaza and try award winning food without having to spend an arm and a leg at the establishment itself.  Perfect time to share with a friend and try it all while looking at some of the best artwork in the country.

This year the event takes place on September 21st-23rd.  Parking is crazy so I recommend taking an Uber or Lyft that evening so you don’t have worry about parking.

My First Listing

I never thought I would be so nervous when it came to listing my brother-in-laws home.  Going into very confident, I soon realized that I was putting all this pressure on myself to be perfect because I didn’t want to mess anything up on my first listing.  This house was a charming ranch in Prairie Village, Kansas (a highly sought after area) and I assumed it would go quick.  The market is super crazy right now in Kansas City, homes are selling in the matter of hours and for over asking price.  Can you imagine trying to purchase your first home for $250,000 and having to offer $20,000 over asking price?  Crazy, but that is exactly what is happening now.  I’m hearing stories everyday about clients losing in bidding wars while still going over list price and its not only frustrating for them, us Realtors are frustrated too.

My brother-in-law and I decided we were going to get the place fixed up and he was going to move out in order to keep it “show ready”.  His family worked so hard to get everything cleaned and staged in order to show home buyers the potential in this home.  He had bought this home back in 2014 for a steal (it was a foreclosure).  For the past couple years he has been doing updates here and there in hopes to sell it when the time was right.  Apparently April 2018 was the right time.  Woo Hoo!

 

Above are some before and after pictures.  I had KC Media Team come over and take the listing photos of all the hard work he did.  Aren’t they great?  I loved how the photos turned out.  Remodeled kitchen, refinished hardwoods throughout living and bedrooms, and fresh paint everywhere make a huge difference.  Beautiful. (Kitchen remodel done by Residential Revival)

We listed it on a Friday and it was under contract by Monday evening.  All that hard work paid off.  Now we wait until closing…

A Little Backstory

I wanted to explain why there was an influx of blog posts all of a sudden.  I used to write a blog called Mother of Pearl, which was basically a motherhood and lifestyle blog.  After starting my real estate career and writing a separate blog for that, it only made sense to combine them together. Although I will post about Kansas City Real Estate, I will try to keep this fun and exciting as well.  All Real Estate all the time will gets redundant so I will strive not to bore you.

As an update from the Mother of Pearl blog, I am still cancer free!  I have been so fortunate to have the very best care from The University of Kansas Cancer Center and the love and support of my family and friends.  So much as happened in the past year and I will eventually write all about it but until then, adios!

PS:  Aren’t you digging my professional headshot!! I plan on retaking them and doing something more causal with a real photographer, Lori Robinson.  Check out her website for more information http://www.lorirobinsonphotography.com.  She is AMAZING!