What Determines the Price of your Home?
So you’re scrolling through new listings, and you see a handful of homes that just might work.
They’re in your first-choice neighborhood, have the bed-bath count you’re looking for, and a grassy yard perfect for your little ones to play in — both your kiddos and your four-legged friends.
You have just one question: Why the $20,000 difference in their listing price?
After you read this post you’ll be able to sniff out the exact reasons those houses you love are priced so differently. So here we go, the 5 main factors that go into pricing a home:
1. First up is location.
Where a home sits in proximity to schools, restaurants — even to our beloved Target, affect the desirability and listing price of a home. The location won’t ever change, so this is one of the largest factors influencing price.
2. Next is size & age.
If two homes are in a similar location, we now check out both the square footage and the age of the home. On one street, you can have as much as a 10-15 year difference in age of a home and just as much difference in size. When scrolling through listings, always look for how old the home is and be sure to check out the data on price per square foot.
3. Another factor used to determine the listing price is what’s known as “comps.”
Realtors use a process called Comparative Market Analysis (or CMA for short) to estimate a home’s value. Simply put, they pull recently sold homes in a specific area or neighborhood, called comps, to see what’s selling — or not, and at what price.
4. And last, let’s talk upgrades.
A brand-new kitchen or a sleek & modern master bathroom is always going to demand a higher listing price than an outdated counterpart. While some home buyers want to remodel themselves, many are happy to purchase an updated home that’s move-in ready.
If you’re thinking of selling your home, you want to steer clear of overpricing and underpricing. An experienced real estate agent can help you avoid both pricing pitfalls.
Curious about what your home is worth in today’s market or how much home you can afford? I’d love to chat!