Selling your home is more than just sticking a "for sale" sign in the front yard. As Joel Berner, a senior economist at Realtor.com, points out, you need to grasp the local market dynamics, get your home ready for potential buyers, and decide whether hiring a real estate agent is the right move. Yet, nothing beats nailing the initial asking price.
Berner warns that if you start with the wrong price, your home might linger unsold, eventually forcing you to reduce the price anyway. "Setting the right price at the outset is crucial," he emphasizes.
Amanda Pendleton, Zillow’s home trend expert, echoes this sentiment. She notes that homes priced and promoted strategically often sell within weeks, unlike those that miss the mark on pricing, which can remain unsold for a few months. Here’s what you need to consider if you’re planning to put your house on the market.
Understanding the Current Housing Market
This year has seen an uptick in home sale listings, leading to a more competitive scene for sellers. Buyers now have more choices, making it a bit tougher for sellers, as Berner explains.
Realtor.com found that new listings grew by 0.1% for the week ending March 1, marking the eighth week of continuous growth. February’s data showed a 27.5% rise in available homes compared to last year.
At the same time, sellers have been lowering their prices as homes stay on the market longer. The average property now spends 66 days listed, which is five days more than the previous February and the longest since February 2020. Moreover, Realtor.com indicated that 16.8% of February’s listings saw price cuts, a notable increase from last year and the highest recorded since 2021.
A report from January by the National Association of Realtors revealed a dip in homes selling above the asking price (15% as opposed to 16% the month before). Concurrently, listed properties received an average of 2.6 buyer offers, up from 2.1 the prior month but stable compared to 2.7 from last year. "It’s no longer the seller’s market we’ve seen in recent years," comments Jessica Lautz, deputy chief economist at the National Association of Realtors.
Finding the Right Price for Your Home
If you’re hoping to pinpoint a viable asking price, Berner advises that researching recent sales of similar homes in your area is key. Look at properties mirroring yours in size, features, and condition.
It’s also vital to calculate how much equity you’d need from the sale to cover your next home’s down payment, closing costs, and moving expenses. If you’re worried about selling for less than it’s worth and have the option to wait, then biding your time might be best, Berner suggests.
For a rough idea of your home’s worth, automated valuation models (AVMs) offered by online price estimators can be quite useful. These tools harness algorithms and public data to estimate property value, according to Bankrate. However, experts warn that these estimates might only offer a broad range. Since AVMs depend on public records, any renovations you’ve done that aren’t reflected in the records could lead to inaccuracies.
For a more nuanced evaluation, Jessica Lautz advises consulting a professional home appraiser or a real estate agent. These experts will evaluate any improvements directly and offer precise insights. Amanda Pendleton recommends partnering with an experienced local agent who is intimately familiar with your neighborhood.
