As soon as a home goes up for sale in your neighborhood, are you Googling to find out how much they are asking for the house? Admit it. We've all done it at least once. Because, many of us believe that whatever that home sells for is what we can get for our house too. Depending on what you do with the information, this can be risky.
There are many factors to consider when pricing a home for sale, or when determining whether we should invest more in improving the home.
One factor that has a very strong correlation to value of a home is the style of the house. Not the style of your decor, it is the type of home that you own.
If there is a ranch, a cape cod, a colonial & a raised ranch on the same street and they all are in similar condition it is very likely that they will not sell for the same price per square foot. In fact, if it were a competition between neighbors to get the highest price per square foot, I would bet on the owner of the ranch.
Who would come in last? It will most likely always be the raised-ranch owner. In fact, in the past month, the raised ranch owners collected over $33 less on average per square foot than a ranch owner. That is significantly less.
Now, if you are just shopping for a home and you love raised-ranch style, don't let the differences stop you from buying what you love. But, just know that you should be careful not to over-improve your home if you think that you may sell sooner rather than later.
TIP: If you are looking to sell or improve your home, don't value or price your home based only your neighbor's home sales. If you have a ranch and they all have cape cods, you're going to under-value your home.
Source: Erie County NY April 2016 Home Closed Sale Data.
DO Get Objective Opinions
Invite your closest friends over for a drink or two. While they are there, give them a pen and a piece of paper and ask them to walk through your home. Why? Because, you want their initial opinion of things that you can do to prepare your home for sale. Who isn't more honest than a good friend after a drink or two? And, many times homeowners overlook things that they have grown accustom to living with over the years.
DO Prioritize Home Staging Ideas
Most people don't have the time or money to make our homes look like the homes on HGTV and home buyers don't expect the home to be 100% perfect. So, review the list of recommendations from your friends and prioritize what you are willing to change and what you may not be willing to change.
DO Call a Real Estate Professional
A real estate professional will be able to help you finalize & prioritize your home staging needs based on information from 100s-1000s of other homes in your neighborhood. This can save time and money. Who wants to remodel the kitchen or bathroom if they don't have to?
DON'T Assume that the Zillow Price is Right
Nationwide, Zestimates are currently within 5% of the final sale price only 38.4% of the time. (Source: http://www.zillow.com/zestimate/#acc ) Therefore, if you are using Zillow to price your home, it is probably not the right place to start. In fact, the MLS system that real estate professionals use doesn't always price the homes correctly either. That is why, for my clients, I build a customized Excel file that explains exactly what comparable homes I use and how I derive the recommended list price for them. Always ask how your agent arrived at their recommendation.
DON'T Try For Sale by Owner
Many people "try" to list For Sale by Owner (FSBO) first and then if they don't sell, they call a real estate professional. FSBOs only accounted for 8% of home sales in 2014 and the typical FSBO home sold for $210,000 compared to $249,000 for agent-assisted home sales (Source: http://www.realtor.org/field-guides/field-guide-to-quick-real-estate-statistics ) It is a lot of work to effectively market and sell a home, so why do it if if on average you would make more money doing less work? Agent commission averages ~7% therefore, the average person selling For Sale by Owner would have made over $21,000 more after paying the commission and would have had a lot less work.
Disclaimer: These are the opinions of the author and do not represent those of RealtyUSA. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.The owner of will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.
Timothy D. Maciejewski, Licensed Real Estate Salesperson