How Do Realtors Come Up With a Home Sale Price?
Have you ever wondered how a real estate agent comes up with their recommendation for home sale price? Your asking price can have a major impact on how quickly your home sells, so it’s important that your price is appropriate for the local market. What factors does your real estate agent take into consideration? That’s precisely what we’ll explore in today’s article from Southern California Berkshire Hathaway Realtor Brittany Leighton.
What Factors Are Considered When Determining Real Estate Price?
Real estate comparisons or “comps” are at the core of determining an appropriate asking price for your home.
Your Realtor will begin the process by finding a few local properties that are comparable in terms of location, square footage, property age, home style, and the number of bedrooms and bathrooms.
It’s key to find comparable real estate listings that were recently sold. The sale price is key because you can put any asking price on a property and it has no bearing on what people are actually willing to pay for the property. For this reason, your Realtor’s comps are always homes that have recently sold; not homes that are still on the market.
Ideally, the comps will be from the same neighborhood, but this isn’t always possible. The neighborhood and location can have a major impact on the home’s sale price, so it’s common to make adjustments in price if your home is located in a different neighborhood from the comps. Certain neighborhoods have a much higher home value, particularly those that are located in an area with beautiful views, particularly water views.
It’s also important to use recent sales; the more recent, the better. The real estate market is constantly evolving and changing, making those recent sales the most accurate determiner of how much you can expect to see for your property.
What Happens if You Overprice Your Home?
Overpriced real estate can be very slow to sell. While some are tempted to overprice the home with the intent of having room for negotiation, this tactic can backfire in a big way. This is because the elevated asking price may put your home in a different price bracket.
Buyers typically tend to view properties in the same price bracket so when viewed along with other appropriately-priced homes in the same price range, it’s likely that your house will pale in comparison. This can result in a negative impression of your property that’s hard to eradicate, even if you reduce the price in the future.
What’s more, your target group of potential buyers may not ever view your home if it’s overpriced, as it will be in a price bracket that’s beyond their budget. Many buyers won’t view homes that exceed their price range to avoid the disappointment that may result if the owner won’t agree to lower the price on a home that they’ve fallen in love with.
It’s important to take your real estate agent’s advice when it comes to pricing your home. Your Realtor is an experienced real estate professional, with a deep understanding of the current market conditions. Remember that your Realtor wants your home to sell just as much as you do!
Contact Realtor Brittany Leighton to Buy or Sell a Home in Southern California
Brittany Leighton, of Berkshire Hathaway and Brittany Leighton & Associates, Inc. specializes in luxury property sales in Southern California, including Orange County.
If you’re ready to sell your home or wish to buy real estate in Southern California, turn to an award-winning real estate agent, Realtor Brittany Leighton. Call 949.480.7178.