When it comes to selling your home, one of the most important decisions you will make is determining the price. Too high, and your home will languish on the market; too low and you’ll miss out on important financial rewards.
That’s one of the key benefits of hiring a real estate broker. Through scores of transactions, brokers have learned how to hit that pricing sweet spot.
In a recent article in the Baltimore Sun, real estate brokers Bob and Donna McWilliams noted that pricing is an art, not a science, and broke down their process in arriving at a number.
“You’ve got to start somewhere, so we initiate the process with broad strokes,” they write. For example, “Based on sheer experience, we’ll ask ourselves, ‘will this house sell for something in the $600,000s, or is it more of a $500,000 kind of house?’ Then we’ll narrow it down a bit more,” considering if it might sell, perhaps, in the mid $600,000s and so on.
They then study sales data from the neighborhood, keeping in mind that “no two properties are exactly alike” and trying to reconcile the differences. If one house has a garage, for instance, it might be worth more than one that does not. The authors warn that price estimates from online sources like Zillow are “notoriously inaccurate.” They steer clear, using more reliable competitive market data.
They also consider current market dynamics: “Some neighborhoods are highly sought after, but only with certain types of properties. There are times when big houses are all the rage…” etc. “[I]t’s critically important to fully understand how the market might help or hinder the sale of a specific property.”
After such consideration, they feel confident in their number when they reach a conclusion. A good agent, they note, will hit the sweet spot, frequently come “within 5% or less of the final sales price.”