When you step on the lot at a car dealership you’ll notice a variety of cars and a variety of prices. The reason for the range of dollar signs stems from several different factors. The sticker price is the result of a number of elements ranging from MSRP to the dealer’s invoice. There are also physical traits that can inflate or reduce the cost of buying a car. Age, engine size, amenities, technology, mileage, and more all directly influence how much you could end up paying for a new set of wheels. With all of these moving parts there is a lot of room for negotiation. In this sense buying or selling a car can be a lot like buying or selling a home.
Arguably the most critical step when it comes to selling your home is setting an accurate and appropriate price. The same goes for buying a house. It is very important that you understand what a fair price is for the property you are considering. This is where REALTORS® offer so much value in helping both buyers and sellers calculate and consider pricing. Here are four things that influence the price of a home.
Historical & Comparable Real Estate Sales
Looking at the historical sale prices of an older property, combined with the prices of homes in the area of comparable size, age, and condition can provide a consistent baseline for both setting a price, and negotiating.
Age & Condition of the Home
Both of these features are imperative when it comes to determining the future cost of ownership. In terms of maintenance, older homes could require more work and money in the long run. The foundation, electrical work, structural integrity, plumbing and overall age should be strongly considered from the perspective of both the buyer and the seller, and the price or offer should reflect it.
Location, Location, Location
This may sound cliché, but it’s still very true. Everything from the market to the neighborhood to the schools to nearby attractions and amenities will dramatically influence the price. Convenience, economy, and education are all major considerations for a buyer.
Size & Appeal of the Home
This sounds obvious, and as buyers become more focused on price per square foot, it is important to price accordingly. Other factors like the layout of the home and additional features (like a pool, fence, patio, etc.) will also play a large role.
While buying and selling a home is a big decision, the success of that decision ultimately comes down to price. How much do you pay, or how much do you get? Trusting a REALTOR® from either side of the transaction will help ensure you get exactly what you need.