Everyone desires to sell their house for the most money. However, best way to sell your house at the right value can be a stressful task for many. It is essential to determine the right price for your home. There can be a number of pre-requisites that must be considered to enlist your home at a price which is practical. The following are discussed below.
 

Ø  Before setting a price, you should establish a keen understanding about the economics of your local market. The demand and supply of homes is a crucial price determining factor. In a buyer’s market the number of homes exceeds the number of potential buyers. This tends to lower the average pricing value of homes in the market. On the other hand, when there is a seller’s market, there are more buyers than there are homes to sale. In such a situation, the prices face a spike as buyer’s compete for fewer homes. Days on Market (DOM) is a popular real estate statistic which depicts how long your house has been actively listed. If similar homes to yours are selling faster than the average DOM for your area, then it means that the demand is high. Another way of gauging the market conditions is to monitor the price appreciation of homes. An increase in the prices is an indication that buyers are paying more. The knowledge of all these trends not only facilitate you to list your house at a better price but also enables you to stay relevant and up-to-date in a saturated real estate market.

Ø  It is also essential to consider the time of the year when you are listing your house for sale. Seasonality affects the number of people seeking to buy homes. During the summer months, for instance there is a high influx of people looking for homes. That is because it is easier to carry out the pack and move process, specially when the children are having their school holidays. Other than the seasonality, you should enlist your house essentially at a time when there is enough equity available to you in order to carry out expenses like the current mortgage, the costs of selling and moving. It should also be considered that the time of selling your house does not overlap with other personal commitments and life events. The list of priorities and their respective opportunity costs should be carefully weighed, so that every task is managed sufficiently. 

Ø  There are several different tiers of housing, and a pre-determined price range for each tier in which the customer is willing and able to pay. Depending upon the tier your house falls into, you should try to stay within the confinement of the price range and avoid over pricing it. This is because eventually, in order to  in a competitive market, the price has to be lowered. Constant fluctuations in the price, particularly when it has been decreased from a higher price, creates a negative perception in the eyes of the buyers. They might think that the property has some defects. It makes your position as a seller weak and decreases your negotiating power. Furthermore, if the price exceeds the price range then there is a high risk that your house might go unnoticed in the listings. These factors lengthen the time in which your house is sold. The longer it takes, the greater the repercussions are. For example, costs such as that of mortgage, storage fee etc. A desirable buying opportunity for yourself could also be missed during that time.

Ø  Having a keen understanding of all the costs that will be incurred during the process of selling is important. It is conducive to making better and informed financial choices. It is estimated that the total selling costs might go up to 10% of the sale price of the house. These costs include the following: 

a)     Staging costs

b)    Repairs and renovations

c)     Agent commissions

d)    Seller concessions

e)     Closing costs

f)     Transition and overlap costs

g)    Moving cost
 

The purpose of keeping an account for these expenses is to fill in gaps between your expenses and earnings, make room for savings and consequently have more influence over setting the most ideal price for your house. 

Ø  The process that you choose for selling your house is also a yardstick which can determine how you appraise your house. You may either abide by the conventional way of selling the house, which is finding an agent, listing your home, negotiating with a buyer, and then closing a deal. However, you may also choose to go for the method of for-sale-by-owner (FSBO). In FOSB, the step of reaching out to an owner is omitted as you take charge of the functions performed by an agent. In this way, you can essentially save yourself from the hassle of finding a suitable agent and also paying their fee. However, in order for this method to be favorable for you, you must possess sound knowledge and ample expertise in the forte of real estate. Other than these methods, you may also reside to companies that use technology to make an offer on your home instantly.

Ø  Renovations and retouches that might seem to be minor might add more value to the price of your home than larger renovation projects. Peripheral changes such as a kitchen remodel or revamping the bathroom can be of more significance while requiring less time and investment. So, always consider making these minor changes before enlisting your house for sale.

Ø  Finally, it is crucial to have the awareness of the difference between the highest offer and the best offer. A high take home price might seem to be attractive at first, however, there can be a number of underlying contingencies and conditions which loosen the viability of the deal. A contract might include a set of terms and conditions which need to be fulfilled. In case of non-fulfillment of either of the aforementioned contingency, the buyer or the seller has the right to cancel the agreement. Those contingencies could be:

a)     Financing contingency: 

If the buyer isn’t able to qualify for a mortgage, having a financial contingency can allow them to cancel the contract. Upon agreeing to this condition as a seller, there is a huge risk of getting your time and efforts wasted. You then have to repeat the entire process of finding a suitable buyer.

b)    Home sale contingency: 

This contingency allows the buyer to first acquire all the proceedings from the sale of their previous house. After they have received all the money, they would move on to buying your house. The underlying risk here is again that of buyer walking away from the deal. This could happen in cases where the timing of the sale doesn’t match or they are not able to sell their house at all.

c)     Inspection contingency: 

This contingency gives buyer the liberty to ask for repairs, renovations and even a way to revoke the offer if they find any major issues that weren’t disclosed earlier. 

In case of less competition, there is a chance of buyers looking for more contingencies to be incorporated in the deal. Based on this factor, it does not always necessarily mean that the highest offer is the most ideal offer for you.