If you’ve decided it’s time to sell your home, the next question you likely have is: “What do we list for?”. Like many, this is a complex questions with many answers. Your goal is likely to get the most possible for your house, but it could also be to sell as quickly as possible or find a buyer who can accommodate your needs. To help you with this process, we take a few steps to find the right approach. There’s a good chance you have a number in your head, and our goal is to match that goal with what your local economy will support, then develop a plan to reach your sales goals.
Determine A Broker Price Opinion
The first step for most agents, us included, is to determine a Broker Price Opinion. This is a price decided by looking at the other houses in your neighborhood which have sold recently or are on the market. Sold houses are the best to use, because they show what buyers are willing to pay, how close to list price they bought, and how updated the houses were during the purchase.
Several factors go into determining a BPO from sq footage to how updated the features are. Houses with more square footage have a different price per sq ft than smaller houses. Houses with brand new floors throughout might justify a higher price/sq foot than a similar house with original carpet. For this reason, some sellers opt to update certain features in their house to prepare it for sale. At the end of the day, a BPO is a rough estimate for what a broker thinks your house will sell for. You can have 12 brokers and 12 different BPO numbers.
BPO Vs Online Estimates
Online housing sites are a major frustration point for real estate agents. They’re often inaccurate, and they often allow sellers to put information on there that they really shouldn’t be giving out. One notable such site is so convinced that their pricing algorithm is inaccurate, that they offered a $1 million reward for anyone who could improve it! So don’t trust any online estimates on the value of your home.
Sometimes sellers will try to list their house for sale by owner (FSBO) without first talking with a broker. This FSBO price can be syndicated on some of these websites, and if they’re significantly off compared to what a BPO would generate, they can hurt your sale. We’ve seen people list their houses on these services for a lower price than a BPO suggests. Then when the seller tried to sell their home for a fair price, the buyer’s agent had good leverage to say “the sellers were willing to accept this lower price, what changed?”. We suggest avoiding this issue to begin with by not trusting online estimates for your home.
Determine An Approach: To Get More or to Sell Faster?
Obviously job #1 is to get as much as possible for your house given your needs. But what about when the amount you want to get for your home is significantly higher than our BPO suggests? It’s your home, and most brokers will give you the option to select the final price, however some may decline to list your house if you’re unwilling to list close to their BPO. This is why it’s important to consider your approach and how to deal with BPOs and selecting a listing price.
If your desired price is higher than our BPO, you’re free to list at this price. We will work together to determine an approach to bringing the price close to the BPO over time until you find a good buyer. This can take longer, and it might cost you in the form of paying your mortgage while the house is on the market. However, it could also be the approach that allows you to find a buyer for a little higher price point. If you’re willing to be patient, listing at the higher spectrum or above your BPO is the approach to get more for your house.
When sellers want to sell fast, we look hard at pricing competitively. Many factors can cause a seller to need to sell fast. Generally speaking, the primary factor in our market that causes a home to sell slowly is price. If you’re priced close to our BPO, or below, you can expect to facilitate a fast sale. We try to price houses as close to their appraisal rate as possible to facilitate a fair, fast sale to begin with. Tempering your expectations and considering listing at the BPO or below is a fantastic first step to selling fast (along with proper staging and marketing).
Listing At Your Chosen Price
Once we’ve determined a price and approach we’ll be ready to list! Adjusting your price is always an option, and can be a motivating factor for some buyers. Listing at the right price is the best approach since it’s seen by the most people during it’s initial syndication, but adjusting the price can help the house sell if it’s not getting enough showings per week.