Pricing Your Home When It's For Sale By Owner

By: Jan McBee
Submitted: 2007-01-17 16:16:36
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Pricing your home correctly is the most important part of selling it. If you price it too high, you’ll lose buyers. Too low, and you’ll lose money. To determine the right price, you must decide how soon you need to sell your home, and you’ll need to research local housing prices.

A word of caution: Many sellers make the common mistake of not setting their emotions aside and placing too high a value on the wonderful memories and joy the house has brought them. Don’t make this mistake. Remember, a buyer is looking for the most house for the least amount of money. They’ll add their own memories later.

Deciding How Soon You Must Sell
First, decide how long you can wait to sell your home. If you need to sell it quickly, you’ll set a lower asking price than if you have more time. Since you’re selling your home without a real estate agent, you’re not paying an average 6% commission, so you have a much greater degree of flexibility in pricing your home. If you need to sell quickly, you can price your home noticeably below the price of similar homes in your area to attract more buyers.

Finding the Prices of Similar Homes
Once you’ve decided how much time you have to sell your home, you’ll need to know the asking prices of houses similar to yours that are in your general area. Finding these homes can be done easily on the Internet by going to any search engine, like Google.com, and typing in “houses for sale” plus the name of your city or town.

You’ll see links to local and national real estate websites that show all types of houses, most of which are listed with real estate agents. Look through these websites for houses that are similar to yours and close to yours geographically. Compare the number of bedrooms, bathrooms and the house size. Other items to compare include acreage, setting, fixtures in the home such as lighting and appliances, and other amenities.

Setting Your Price
Once you’ve come up with a list of similar houses, compare the prices and the features of each home, then estimate what your home could sell for. The longer your list, the easier this will be.

Now remember, because the houses on most of these websites are listed with real estate agents, their prices reflect real estate commissions. This is something to take into consideration when you set the asking price for your home.

Buyers know that because you’re selling your house on your own, you’re not paying a commission. In fact, they’re choosing to buy For Sale by Owner because they believe they’ll get a better deal. And they’ve done the same research you have. Consider pricing your home just below the price of a similar home that carries a real estate commission. If you need to sell your house quickly, price it even lower. Remember, you’re not paying a commission, so you’re still saving money. If you have more time, price your home a little higher and be prepared to wait longer.

House Appraisal
Another method of pricing your home is using a local real estate appraiser. They will inspect your home and create a detailed report that includes comparables (houses similar to yours and in your area that sold recently). An appraiser’s findings are certified, which gives you solid proof that your asking price is fair. Appraisers charge between $200 and $400.

Pricing Summary
Your goal is to sell your house. To do this, your price should be fair and it should reflect the prices in your market area. By following the guidelines above, you should be able to get what you need for your home while at the same time attracting the greatest number of buyers. You can always change your asking, but it’s wise to price your home fairly from the beginning.

Jan McBee is the chief writer and research adviser for DwellWell.com.

Article source: Expert Articles