If you’re thinking about selling your home in Ellicott City (or anywhere else in Maryland), you’ll most likely want a REALTOR® to let you know how much it’s worth. But if you’re like most people, you’re not really sure how real estate agents come up with home prices – and you might not know how important it is to get your pricing right before you even put your house on the market.
Here’s what you need to know.
How Much is Your Home Worth?
When you talk to a REALTOR about selling your home, you need to know three things:
- How much is it worth?
- How quickly will it sell?
- How much will it cost to sell it?
All of these questions are very important – but none so important as how much it’s worth, because that determines how much money you’ll make on the sale.
When a REALTOR prices a home, he or she looks at several factors: its size, its location and its amenities. Your agent will also look at other, similar homes in the same area – that way, he or she can tell what buyers are willing to pay for a home like yours. These comparables (generally called comps) can show how much money is reasonable to ask for your home.
Remember: Your home is only worth what a buyer is willing to pay for it.
A Closer Look at Comps
When a real estate agent looks at comparable homes, they’re not looking at houses that aren’t on the market (or that haven’t been recently). Agents are looking at homes that:
- Have sold within the past few months
- Were on the market but didn’t sell
- Are currently on the market
All of these homes will be near yours – at least in a comparable area – so your agent can get the most accurate picture of what your home is worth.
Each of these homes will have features similar to yours, such as:
- Number of bedrooms and bathrooms
- Upgrades and improvements
- Neighborhood (and neighborhood features, like playgrounds)
To come up with an accurate price, your real estate agent will compare these homes and their listing or sales prices to yours. It all results in a comparative market analysis, or CMA.
Homes That Have Sold Within the Past Few Months
Homes that have sold within the past few months show your REALTOR what buyers are willing to pay for a house like yours. This is the most important range, because it’s resulted in sales.
Homes That Were on the Market But Didn’t Sell
Homes that failed to sell are a good indicator of the high end of the price spectrum – typically, when homes fail to sell at the price they’re listed for, they’re listed for too much money.
Homes That Are Currently On the Market
Homes currently for sale show your real estate agent what your competitors are up to. You and your agent can use those homes’ prices to determine how competitive you want to be, as well.
See What’s On the Market in Ellicott City
Why is it So Important to Price Your Home Right the First Time?
The best thing you can do when you’re selling your home is to price it right. You may not want to price it where your agent says you should – but if you do want to sell it without losing money, your agent will tell you exactly how to get that done.
What Happens if You Over-Price Your Home?
If you over-price your home, it’s not going to sell – at least not quickly.
When homes that are a lot like yours are selling quickly for $249,000 and you list yours for $279,000, you’re cutting out all the budget-based searchers. If a lender will give someone $250,000 to spend on a home, that person won’t even look at homes that cost $279,000 – they don’t have the cash to spend on those homes.
That higher-priced listing bumps your home into a different level of competition, too. Your home is listed beside homes that are priced at what buyers are willing to pay – but generally, those homes will offer more (in terms of size, amenities, location or even upgrades) than yours does. When prospective buyers compare your home to the other homes they can afford, yours will come up short.
What Happens if You Under-Price Your Home?
The real risk of under-pricing your home is that you’ll leave money on the table – money you could use as a down payment on your next home, for that vacation you’ve been wanting to take, or for your “rainy day” fund.
Are You Buying or Selling a Home in Ellicott City?
If you’re thinking about buying or selling a home in Ellicott City, we can help. Please call us today at 443-955-1227 to find out how! If it’s easier, fill out the form below and we’ll get back to you right away.
While you’re here, please explore homes for sale in Ellicott City – you can sort listings by price, size, amenities and more.