One of the hardest tasks for a For Sale By Owner (FSBO) property home seller can be pricing the home correctly.
Correctly pricing your FSBO real estate for sale is an important factor in having a fast, successful sale. An overpriced home will attract less interest, linger in the MLS listings and possibly expire without an offer. On the other hand, pricing your home too low could harm you financially. There is a sweet spot price for your home to get the most from your sale, and here are some ways to find it.
Pricing FSBO Listings
Get a Comparative Market Analysis
A comparative market analysis (CMA), usually known as comps, compiles information about similar surrounding MLS home listings. The CMA compiled by your FSBO listing agent will include active, recently sold, expired and other FSBO listings. Typically, a CMA will only include homes within a ¼ to ½ mile radius for an authentic view of your closest neighborhood competition. Market analysis is a good pricing gauge for your property in comparison to other homes in the same neighborhood, square footage, and built around the same time.
Most FSBO packages include a market analysis, or one can be ordered a-la-carte, that will give you comps of homes for sale or recently sold in your neighborhood so you can determine the listing price. We will send you updated comps during your listing period so you can see what prices are resulting in sales.
Should You Get a Home Appraisal?
Some sellers want to get a professional appraisal of the home to determine the market value. In most cases, this is not necessary. While a formal appraisal can help you fine tune the price of your home, appraisers also make mistakes and are not always in tune with the latest housing market trends in your area. The buyer will usually need to obtain his or her own appraisal prior to close, so generally you should not need to get one. In most cases, the CMA is your best road to getting a good price approximation for the market you are in. However, an appraisal is highly recommended if there aren’t good comps in your area as it is your next best tool for getting a good market valuation.
Don’t let your FSBO Listing get Lost in the Crowd
If you notice that there are already a number of houses for sale in your area, then you want to set your FSBO real estate apart. If the majority of these homes fall in a close range, such as $450,000-$460,000, opt instead to price your home at, say, $445,000 to expose your property to a separate bracket. It prevents you from getting lost in a sea of listings, especially in a buyer’s market.
Slightly underpricing your FSBO listing can be a selling tactic to quickly attract more offers. Often, especially in desirable areas, this will result in the price being bid back up to market. An FSBO seller, with low or no sales commissions to be paid, has the advantage of being able to price slightly below market and thus get more offers than the competition.
Avoid Rounding Up
Market analysis shows that people are more likely to buy an item that is sold at $19.95 compared to items priced at $20. This idea suggests that you may garner more interest by selling your home for $459,000 or $459,500 as compared to $460,000. On the other hand, 999-pricing, such as $469,999 may be less effective.
Be Honest About your FSBO Real Estate
Now that you have found your target asking price, it’s time to make any final adjustments. Account for undesirable traits like busy streets, railroad tracks, the area of town, etc. You may have to lower your asking price by 3-10% to compensate for the inconveniences. Be upfront about any major repairs you had to do recently and disclose any findings during pre-inspections. On the other hand, be sure to call out major renovations such as new roof or kitchen remodel as these may allow you to increase your asking price.
Consult your Friends and Family
You’ve fixed up the home and decided on your opening asking price. Now invite friends and family over for a walkthrough. Ask how they feel about your asking price and whether they would have any reservations about buying. Ask for constructive criticism about details, big or small, to help you maximize the mood and appeal of your home.
The best thing you can do during the selling process is to be flexible. You want to sell your house quickly, but you need to be willing to change up your game plan if it’s not working. If you don’t get offers within a reasonable time, say 1-2 weeks, consider a small price reduction.
Get FSBO Listing Help with a Flat Fee MLS Listing Service
Selling your home for sale by owner can feel like a complicated project. Luckily, GoToFSBO, our online Virginia-area FSBO real estate company, offers a full set of resources and services to make selling your house easy. We can point you in the right direction, answer questions, provide support, and help you sell your home faster and easier than you thought. Find out more and get started today.