PRICING YOUR HOME IS PART SCIENCE AND PART SKILL

When we discuss pricing with prospective clients we generally say pricing is 80% science and 20% art. Understanding the nuances of the market and the unique aspects of each home is of paramount importance to accurately pricing a property. Let us tell you a bit more about what goes into our pricing reports.

The science

Although the science part of pricing a home is straight forward, it’s not always easy because there are several factors that go into evaluating the data. The first consideration is market data and how the recent sales of similar homes compare to the property. A good analysis will incorporate a deeper understanding than just bedrooms, bathrooms, and square footage. It will look at recent updates, age of mechanicals and systems, etc. 

Another data point that should be considered is current inventory. How many homes are on the market in the neighborhood? How do they compare to this house? How long have they been for sale? If a home has been on the market for longer than typical, why is that the case?

An understanding of economic indicators is important, too, as interest rates and market turbulence impact buyer behavior.

The art

It’s very important to consider an individual home’s assets and limitations. Upgrades, layout, condition, curb appeal, size of lot, how well traveled the road is, and even what the neighbor’s house looks like can impact value.

Beyond the house and property, we need to consider buyer psychology. In today’s market, buyers are primed to expect homes to receive multiple offers soon after being listed so if a house is on the market even as few as ten days, buyers start to wonder what is wrong with it. This creates an environment where it’s key not to overprice a house. If you do, buyers will hesitate to submit an offer and the best way to get the most amount of money and the best terms is to have buyers compete against each other. The fear of loss is the most effective way to turn a rational buyer into an irrational buyer.

While real estate happens all year, there are some seasonal considerations. Spring tends to be a time when more listings hit the market so competition might be higher. The Thanksgiving and Christmas holiday season tends to distract buyers and can cause a temporary lull in market activity.

Our approach

We combine the science and the art as well as our understanding of buyers to provide you with a detailed pricing report, complete with links to comparable homes that have sold and active listings. This produces a range that we expect will result in a sale that gives you the best price and terms for your property. That said, we view pricing as a collaboration which is why we share all our data with you so if you come to a different conclusion, we are more than happy to discuss it with you.