How much can I sell my house for? This question is the big question every home seller’s mind. Price your too high – your house never sells. Price too low – you risk throwing away thousands of dollars.
What’s the right price to sell your house for?
It depends. Estimating sale price is an “inexact science” – but several indicators exist to figure out how much you should expect to get when selling your house. In addition to house specifications and comps, your sale goals help set the price to shoot for when your trying to sell real estate.
Ready to learn how much you can get . . .while still accomplishing your sale objectives? Let’s get to it then!
Factors Determining The Value of Your House
The first step in answering the question – how much can you sell your house for – is learning the property specifications impacting property value. You can learn the details of your house on the county appraiser website. Counties maintain online databases of every property, including the specifications you need to know. By way of example, check county websites for Miami-Dade, Broward, and Palm Beach in Florida.
Key specifications you absolutely need to know are:
- Square Feet. The size of the house, i.e. the square feet of living area, dramatically increases how much your house can sell for. The larger the living area, the more you can get for it. There are limits, however. Ask yourself: what am I doing with that space? Square footage that isn’t attractive to buyer doesn’t add value (it could even detract if it needs repairs). That rickety old sun porch in the front – it doesn’t increase how much you can get.
- Lot Size. Lot size means the total square footage of the entire land. More land equates to higher prices. Larger lots permit adding a pool,
Living area, lot size, year built, home improvements, and location are key factors for sale price expectations. garden, a patio and entertaining area, a workman’s shed, even an efficiency.
- Room Count. Buyers often place more value on the number of bedrooms and bathrooms than even the size of the house. Parents with several children will need extra bedrooms – regardless how big the master bedroom is. Similarly, two bathrooms is better than one (even if that one bathroom is huge!).
- Year Built. Is you’re house built in 1929 or 1999? It makes a big difference. Old houses often have hazardous materials (radon, lead, asbestos), termite damage, mold or mildew damage, plumbing problems, foundation or structural problems, roof defects, inefficient windows, unsafe electrical wiring, old style finishings. The old houses aren’t built with the latest hurricane and weather protections. Newer homes don’t have these problems and sell for more.
- Home Improvements. These make a big difference in re-sale value, including: pool, central air-conditions, updated heating system, new appliances, window efficiency, wood flooring, and landscaping.
You also need to take a look at location and neighborhood.
Property in the center of Manhattan sells for a lot more than on the outskirts of New York City. For cities and towns, proximity access to public transportation and highways, school district, access to desirable stories, low crime rate, parks, and hospitals can increase values. In rural areas, hiking trails, mature trees, walkability, historic homes, dog parks, community groups can be good features. Run down streets or next to industrial buildings drive down price.
Housing Comps!
Once you know nitty-gritty details of the house, look at “comps” – comparable nearby houses. There are two categories: sold and active listings.
Recently Sold Comps.
You can look at sold comps for free on sites like Zillow and Redfin. This gives a “ball park” of neighborhood sale prices. Unfortunately, these sites are inaccurate, don’t include all sales, and are updated by realtors (NOT the actual county records). Take them with a grain of salt.
Another option is to request a “Comparative Market Analysis” from a local real estate professional. Realtors may want to walk through your house view condition and features. You can also request multiple CMA’s to no rely on one person’s opinion. Redfin defines a CMA as:
A comparative market analysis (CMA) is an evaluation of similar, recently sold homes (called comparables) that are near a home intended to be bought or sold. Comparative market analyses establish the current market value of the home and are prepared by real estate agents. A comparative market analysis is not the same as an appraisal, which is performed by a licensed appraiser.
When assessing how your house stacks up against the comps consider the factors mentioned above: square feet, lot size, bedroom/bathroom, year build, home improvements, location, and neighborhood. Adjust your sale price expectation accordingly.
Active Listing Comps.
Active listings are important because they not only tell you about price, but also time it will take to sell. A very basic (and obvious!) fact is that if you try to sell your house for more than similar properties it will never sell. Why would someone pay more for what they can get for less? How much can you get for your house – that number cannot be more than similar properties available for purchase.
Active listings also tell you how long it will take to sell a house. If there is a glut of houses sitting on the market for a long time, there is low demand (and over-supply). You will not be able to sell your house for a high price. On the other hand, if properties are flying off the shelf and there is limited available inventory, demand is high and you can set price higher to get it sold. you can set a higher price and still you could will have very serious problems selling your house for top dollars.
The metric to measure the supply and demand is called the “absorption rate.” According to the Birmingham Appraisal Blog, it works like this:
Absorption rate is calculated by taking the number of homes that are currently listed for sale, and under contract, and dividing it by the rate of sales for a given period. This figure will tell you how many months of inventory there currently is. Different areas vary but generally speaking anywhere from 4-6 months is considered a balanced market. Anything less than this would be a sellers market because there is not enough inventory to satisfy demand and anything more than 7 months would be a buyers market because there is too much inventory.
Condition of Your House
Consider the condition of your house when thinking about how much you can get for it. Look at the home through the eyes of a buyer. Does it needs lot of repairs? Is it updated? Leaky roof? Wall air conditioners verses central air? If it’s a handyman house needing major renovations, you can expect to sell for substantially less than houses in livable condition.
Not sure about the condition of your house? You have a few options . . .
Professional Home Inspector. Home inspections are limited and non-invasive assessment of the condition of a home. Inspectors typically take a look at the structures and identify any defects. Hiring a professional home inspectors to look through your house ranges from $200 to $500 dollars. Radon, mold testing typically cost extra. An advantage of using a home inspector is banks require a home inspection prior to underwriting a mortgage.
General Contractor. General contractors, similar to inspectors, will walk through your house and identify defects. There are two major differences: (1) general contractors do not charge for the walkthrough – but give an estimate to make repairs; (2) general contractors have less “pure inspection” training. An advantage of using a general contractor is you can use the written report with values of each repair as part of sales negotiations.
If your house needs big time repairs, contact a professional cash home buyer that specializes in purchasing “ugly” properties. House Heroes LLC buys fixer-uppers, rehabs them, then flips or rents them out. We guarantee fair cash offers: give us a call (954) 676-1846 for your fast offer!
What Are Your Sales Goals?
Every home seller is unique. You may be okay with waiting for a long time for your sale, or want to sell as soon as possible. Price the deciding factor in how quick your property sells. When your thinking about the price to sell for, ask yourself the following questions.
- Do I want to sell fast? Selling fast means willing to cut the buyer a discount. Giving you hundreds of thousands of dollars to close couple weeks is a monumental task. This comes with a premium.
- Does the house need repairs? Renovations can cost tens of thousands of dollars. Where property defects exist, the city may issue monthly fines.
- Can I maintain the property? If you live far away or don’t have time to watch, the property is at risk of damage. Squatters can move in. Everyday maintenance will be delayed. Small problems can become big problems.
- Am I missing payments? Late on the mortgage? Owe back-taxes? This results in the bank or local municipality.
- Did I relocate and now have two properties? Two properties often means paying double utilities, insurance, maintenance, taxes, HOA, mortgages. This can add up fast and is wasteful for house not being used.
- Tenants not paying rent? Tenants that aren’t paying rent are a major headache. If you’re not a landlord ready to file for eviction, this rental property is a liability not an investment.
If you answered yes to any of these questions, consider setting your price expectation low enough for a quick sale.
Ready to sell property quick? Give us a call now! (954) 676-1846
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