Selling as a For Sale by Owner [FSBO] means doing all the leg work on your own. This includes pricing your home in a realistic manner. Of course, determining your asking price can be more challenging than you might think…
Ask too much and your home will not sell. Ask too little and you risk losing money that was realistically obtainable. So how do you come to terms with a dilemma like this?
One solution is to scout comparable homes that are currently for sale or have recently sold in your neighborhood. Comparable homes are those that most closely resemble your own, as far as size, features and location. This is an excellent way to establish fairly accurate pricing for your home. The trick is to use only the homes that are relatively close to yours. Things to keep in mind are size, style, condition, area, etc. Comparing a two-storey home to a bungalow obviously won’t do, and the value of a home that is 25 years old will not be a good comparison for a home that is only 5 years old. Be as realistic as possible and be sure to do your reasearch when valuing your home.
What Are The Top 4 Factors To Consider?
1. Square Footage
Appraisers compare homes based on their total square footage. The value per square foot is based on home style. For example, a two-storey home is generally worth less per square foot than a bungalow because it costs less to build up than it does to build out. So, matching your home style is very important when using comparables. Compare with only those homes that do not exceed a difference of 200-400 square feet, if possible. The closer, the better!
Ideally, the age of comparable value properties will fall within 2-4 years of your own home’s birthday (the year your house was built). However, many subdivisions have a fairly wide range between the ages of homes, so you will need to find out for sure from friends and neighbours. This variance is especially common in older neighborhoods where homes have been destroyed and re-built in some instances. Your home may be 5 years old, while your neighbor’s may be 50 years old! Obviously, the extreme age difference has a bearing on the value of each home.
3. Condition, Upgrades & Amenities
Homes may vary in condition and upgrades. Appraisers will deduct value from your home if area properties have upgrades that you don’t. A home with a garage, deck, swimming pool etc. will have a different value than one without these amenities. A newly remodeled home is worth more than one with no upgrades at all. One bathroom is worth less than two… You get the point! Matching homes as closely as possible is the only way to estimate a realistic value.
The three magic words of Real Estate: “Location, location, location.” Yes, it is true, location does matter when it comes to the value of your home. If you look at identical homes… same style, same year, same finish… but one is located in a quiet cul-de-sac and the other is across from a trailer park, the appraised value will NOT be the same. Why? Because where the home is matters. Statistics have proven that buyers will pay more for a better, safer, quieter location. When choosing comparable homes, location is usually a deciding factor. If your home sits across the road from a park, river, trailer court, train tracks, or whatever, look for other homes that have the same exposure or perhaps even more undesirable locations.
Taking these 4 factors into consideration when estimating the value of your home will go along way in ensuring the accuracy of your pricing, relative to other homes in the area. True value is all the bank will allow a buyer to pay for a home, so picking an unrealistic price is simply a waste of time for you and the buyer. Finally, if you are still in doubt, having an appraisal done by a Licensed Appraiser is always the best option.
If you haven’t already, check out CanadianHomeFind’s Selling Packages. With resources like our Open House Success Guide E-book, you can achieve success selling your Home or Condo as a For Sale by Owner [FSBO].