Written by AJ Shirey, REALTOR at Collier and Associates
One of the crucial initial steps when selling your house is understanding the value of your home in the current market. Accurately pricing a property is vital to attract genuine buyer interest and minimize time on the market. It ensures sellers maximize their return on investment while avoiding appraisal issues and enhancing their negotiation position during the sales process. Many homeowners find themselves asking questions like, “What might my home sell for?” or “Where do I even begin?” In this article, we dive into the process of home valuation, the steps involved, and shedding light on the factors that influence the selling price of your property.
Data and research- First, I look at recently sold homes (the past 60 days) in your area. I look at all of the features of the comparables compared to your home: the age of the home, photos, condition of the outside space, landscaping, does it have a pool or other outdoor amenities. I use the property data to find sales comparable to your property. If there is not a sufficient number of comparable properties, changes and adjustments can be made to the search or property data to derive a market value. I compare the same number of bedrooms, bathrooms and garage size in a comparable but if there aren’t a couple, I can make adjustments for extra garage spaces, bathrooms, etc. Just because your home is on the same street as a recent sold, doesn’t mean it will sell for the same price per foot. Condition, staging, the life left in the HVAC, roof and water heater, the paint colors, condition of the flooring, cabinets, the lot, etc. all play into how much a home will sell for.
If your home is on acreage and not in a subdivision, it requires more research, time and skill in determining market value in setting a price. In this case, I go back further than 60 days and I also look in other similar areas as well as land for sale. I may compare a home of a similar age, condition, style and acreage in a town of a similar size as where you are. I also collaborate with other agents or my broker and ask what they think a house will sell for and see how it compares to what I am thinking.
Location and amenities- I also look at what is near your home: parks, trails and how close it is to shopping, medical facilities and schools. A home that is close to amenities and award-winning schools will sell at a higher price. Here in NWA, we are known for the Razorback Greenway and the best mountain bike trails in the country. When your home is close to a trailhead, that can help in the selling appeal. A home near a downtown square will sell for more than a home twenty minutes away. One of the best things about NWA, is how incredible our area is with museums like the Amazeum and Crystal Bridges, Walton Arts Center, the University of Arkansas and Walmart Amp. If you have a property near one of our star attractions and venues it is favorable in pricing your home but the entire NWA market benefits from our incredible live, work and play venues and the beauty of the natural state we enjoy.
Pricing the Brick and Mortar of your home- Price per foot vs. Total Price- There are things that can add or detract from the pricing of your home that can’t be limited to a price per square foot formula . “Example- if you have a 4000 sq ft home in a subdivision where the majority of homes are 2500-3000 sq. ft. If you applied the sq ft price of the normal sized home in an area to the 4000 sq ft home, you’ll overshoot the total price for the area.”- Chase White
Looking at the total price vs. price per foot of the comparables is also a step we take: Chase White says, “ A terrible driveway, bad surrounding neighbors, barking dogs, sloped yard either direction, lack of curb appeal…NONE of this is in the sq footage but impacts price in a way that can’t be calculated (in price per foot)…Garage capacity will be credited on an appraisal to the tune of about 10k. For buyers who have a two-car garage and request a three, that 3rd car space is priceless. They could see the perfect home ever but if it has a two, they won’t even get in the car to go look.” A well-designed home with added features that are “cool” and “unique” also add to the total price. It’s hard to quantify this but when you are in houses weekly with clients, you see the things that make people write an offer.
“I’ve yet to have a single buyer ever tell me their budget is a sq ft price number. It’s also a total price. I love getting a smaller home within a given area. The total price is king. It always has been.” Chase White
Marketing and Staging matters- You and I together work to make the best first impression with how clean, de-cluttered and well staged your home is. A house that is staged, clean and neat on the inside and out, is going to sell for more and we can price it accordingly. I get professional drone photography and create a video to market your home online and on social media platforms.
This is my favorite part! With the right mindset and understanding that you are now marketing your home to sell and putting in the sweat equity to fix the little things, you are preparing your home to get under contract fast and at the top of the market. Many people don’t want to do these things (or you aren’t in the state of mind right now to) and we can still sell your home, but it can’t be compared to a more up-to-update, better maintained, clean and de-cluttered home. It is critical for sellers to objectively look at their home through the lens of a buyer. When we live in our homes, make precious memories there and surround ourselves with photos and objects that have meaning to us, it can be hard to switch that mindset to thinking of the home as a property to market to potential buyers.
If you think you want to sell your home anytime soon, start working on those home maintenance projects. Clean out closets and cabinets. You want the inside and the curb appeal to make an attractive first impression. A house can be priced higher if it is cleaner than it’s ever been, de-cluttered and you have pre-packed half of more of what’s inside. Clean up the landscaping, pressure wash the driveway, and blow off the leaves from the roof and gutters.
Final tip for the wise: Online valuations are not local experts. Your local REALTOR has expertise that is market specific. Online sources do not factor in the condition of your property, the condition of surrounding property, or micro-economic factors a local expert will. A local licensed professional will always be the most qualified source to properly value your home.
