Real Estate Pricing Checklist

You are anxious to get that sign up, but hold on! Before you set the price on your house, take a look at what's going on. Not only your perspective of things, but from the current mood of the market. The market is not sympathetic to "you need" or "must have" pricing methods. The time spent here may save certain headaches and disappointment that lay ahead if utilizing these strategies in determining your home's current value. The home is worth what a buyer is willing to pay for it in an open market. So please take some time and review the following strategies.

Mood of the Market

Markets have moods? They do! You need to judge whether it's a sellers' market or a buyers' market and it could vary by city, state, and neighborhood. Your interest is in your own neighborhood.

And when we mention "market", we don't mean the neighborhood grocery store. The market is a catch-all term for all the ingredients that go into the mood of real estate at a given time. It can include such things as interest rates, home inventory, job forecasts, and even time of year. The market shifts constantly, so you need to raise your antennae and tune into what's going on in your neighborhood.

Market Mood Checklist

• Inventory. How much is out there? Assess the inventory of homes in your area by driving around or use online sites to search for sale homes in your neighborhood. Also, real estate agents send out monthly mailers detailing home sales and include all kinds of information, such as number of homes that are on the market. If you live in a desirable neighborhood and there aren't many homes for sale, you will have a clear edge here. However, if you drive around and do see lots of homes on the market and they're not selling very quickly, you might have to reduce the price you had in mind.
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• Days on the market. Review the homes in your neighborhood and their days on market (DOM). Once again, that real estate mailer that you were throwing away for all those years will now come in quite handy.
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• Look up your ZIP code's Zindex on Zillow.com. Look at trends for the past year and assess whether homes were appreciating or depreciating (e.g. homes in your ZIP code were rising by 2% each month for the past 6 months). Unless you see a downward tick in this number, you can probably assume this will continue. If the Zindex in your neighborhood is rising, that means people are in the buying mood. If the Zindex is on a downturn, that means buyers have the upper hand.
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• Check your local news. If Zillow does not provide a Zindex for your home (in which case, Zillow provides you with a tax assessed value), check your local newspaper's real estate section for charts or articles on sales trends in your ZIP code.
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• Jobs, jobs, jobs. Monitor the job situation in your area. Are companies or factories closing down? Not a good sign. But, if "Major ABC Company" in your local town is expanding, kick your heels up because that means jobs, more people, and more housing will be required. This is good.
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• Track neighborhood values. Each week, walk or drive around your neighborhood and begin collecting listing sheets -- you know, those fliers that agents create to list the facts and amenities of a home. It's amazing the knowledge you gain by tracking neighborhood home values and price points. Ideally, find homes similar to yours and pay close attention to the "action" surrounding them. Are they getting lots of traffic? As you collect these listing sheets, put them in a folder and date each sheet. Make note of the list price, sold price, and days on market (DOM).
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• Attend nearby open houses. This is good for a number of reasons: to observe how other properties are showing and to assess their value, to chat up the listing agent (they have loads of info to share), and to feel the "mood" of potential buyers. Once you do this weekly, you will get an excellent feel for home values and what potential buyers are after. After doing this for a couple of weeks, challenge yourself by guessing what homes "go for" as you approach them for the first time. You'll be surprised at how well-trained your eye becomes with some practice and exposure to homes.
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• Tour some homes with your agent. Get out there -- act like a buyer and see what they see! Hear other sellers make mistakes, hover over you, or talk too much or apologize for condition!
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• Price per square foot. If you don't want to go down on your asking price, you could choose to focus on your price per square foot. Show potential buyers how your price stacks up against others in the neighborhood.