I have always heard that when you go to sell a home, the two main things that can keep a decent home from selling in a good market is pricing it right and providing good accessibility to the property. But in a growing market, how do you actually set your selling price without selling yourself short?
After nearly two years of owning a home in Southern California, I found myself asking some of these kinds of questions, while at the same time, debating whether or not I wanted to scrap the whole selling idea, and try my hand at being a landlord (hey, the numbers seemed to make sense financially).
My husband, my realtor and I began by conducting a competitive market analysis and looked at comps in the area to get a fair market value of our home. It was clear from the moment we started looking that the market had been gaining steam in the two years since we had purchased. It was now hot for sellers—the product that was being sold in our neighborhood were being picked up the day they were listed, and were sold at asking price…and that “asking price” was much higher than what we had purchased it for, enough for us to break even after paying a realtor fee, if not make money in the end.
The issue we first found was that nearly 400 square feet of our home was most likely unpermitted, so an appraisal would most likely not come in at what we considered to be the “true value” and would not match the other comparables in the area. Not only that, but the upgrades and personal improvements made to the house wouldn’t necessarily be viewed favorable by other potential buyers.
Most times, a seller usually argues with a realtor to price higher, but in our case, we priced lower than the realtors’ suggestion, and it all worked out. We got five full priced offers in only three days, and the appraisal came in “at value.”
The moral of the story?
Although i am pleased we were able to close escrow under 40 days from listing our home at asking price, I am left wondering what would have happened if I listened to the realtor and priced $10,000 higher.
In a seller’s market, should you add at least money to the last comparable sale due to lower inventory? Would it have been worth the gamble? Would I be $10,000 richer?