What You Need to Know About Researching Home Prices
There are a lot of home pricing resources out there, and some are far better than others.
When it’s time to sell your house, you may be feeling a little anxious. A chapter of your life is closing. There’s a lot of money on the table. You may be thinking “Is my house priced too high?” “Too low?” “Am I leaving too much money on the table?” These are big questions.
Luckily, you have a few resources at your disposal to figure out where your house stands among the crowd: a listing agent’s expertise and guidance, plus online property sites to get insight into the market.
So take a deep breath. Then do your homework. The more you know, the more confident you’ll be when it’s time to make those big decisions.
Turn to Local Experts — Because They Really Know Their Stuff
The good news: Local market info is freely available online, so you, the seller, can get a sense of what your house is worth.
The bad news: Local market info is freely available online, so most buyers will also have a general idea of what they think your home is worth.
When pricing your house, a listing agent has your back in a way an online property listing site just can’t. An agent:
- Has real world experience in your community.
- Knows the nuances of your neighborhood’s micro-market.
- Can expertly assess how your home compares to similar ones recently sold in your area.
- Can tour your property to determine, inside and out, where your house fits in the real estate landscape.
A website will do none of the above.
An agent will, yes, consider online market data to help you set the price of your home. But he or she will also rely on first-hand knowledge about your home’s unique perks (and quirks), as well as about the neighborhood, to better inform your listing price.
He or she can also recommend ways to market your house (Instagram-able photos, blog-worthy descriptions, etc.), pro stagers who can set your home up to dazzle buyers, and inspectors and contractors who can make any needed repairs.
That being said, you’ll want to have your own sense of what your house is worth too. As invaluable as a listing agent is to your selling journey, being the seller means you’re also the final decision maker.
So keep your laptop out. We’re going to do a little research.
Search Online Property Sites — Because They’ll Give IRL Experience Some Context
Millennials are the largest group of home buyers today, according to a NATIONAL ASSOCIATION OF REALTORS®’ (NAR) report, and they overwhelmingly start their buying journey — where else? — online.
The internet is there for you as well — to an extent — when you’re ready to sell your home.
Online property sites like realtor.com can give you a sense of local real estate trends, including your city’s median listing price, median closing price, and the average price per square foot. As you search, there are a couple important things to do:
- Pay attention to houses in your area that are similar to your own in terms of size, attributes, and location. When you work with a listing agent to price your home, these houses will provide the main criteria for setting the amount.
- Take notes about what makes your house different from the pack. As you look at online listings, think carefully about why your house is worth more or less than similar houses in your community. The better you’re able to articulate these nuances to your listing agent, the better prepared the agent will be to list your home at an accurate and competitive price.
Having this information can also give you confidence in the price your agent ultimately recommends — you’ll know what’s standard for the market, and how the price determined for your house lines up. If there are discrepancies, talk to your agent about how he or she arrived at their price. Unlike the internet, he or she can give you a complete picture of what your home’s price should be and why.
Also, as you search, be aware that not all real estate listing sites are created equal. Realtor.com® aggregates listings from Multiple Listing Services (MLS) around the country, which provides the most up-to-the-minute data about home sales. (By the way, realtor.com® is the official listing site of NATIONAL ASSOCIATION OF REALTORS®, which operates HouseLogic.com.) Most of ‘for sale’ listings at realtor.com®, for example, are refreshed every 15 minutes — so what you see is likely what you get. Another big property listing site (and brokerage), Redfin, also aggregates data from MLSs.
Trulia and Zillow, on the other hand, collect their listing information from a variety of sources, and may not always be as up to date as the MLS.
The takeaway: Seller, beware. Consider your online source. Take what you’ve learned from online listings to your agent to talk about what’s really best for you and your home.
Try Online Price Calculators — With Caveats
As long as you’re on the internet, you might decide to try an online home price calculator. With these calculators, property sites use sale prices near you (and overall market data) to approximately predict your own home’s value.
You’ll find an online home price calculator at almost any property site, and they all work a little differently. Realtor.com®’s home estimator tool, for instance, factors in your home’s square footage and recent home sales in your area to calculate an approximate recommended sale price.
Plug your ZIP code or address into a site to see:
- Homes for sale in your community, which can give you a sense of the overall market
- Estimated prices of similar homes in your area, which can provide a general range of home prices in your area
- Property descriptions and photos of local homes for sale, which can give you a feel for how other homes are being marketed to buyers (and how you can do even better)
Info like this is good to know — particularly because most buyers will see similar numbers when they to online research, too — but you have to take what online home price calculators tell you with a grain of salt.
Online price calculators can be useful as a reference, but they have limitations in terms of their scope (they can’t read nuances of the market like a human can), as well as their reliability. Some, including Zillow’s Zestimate tool, which estimates market value, have been challenged by some users for inaccuracy.
Your listing agent’s knowledge and expertise are more reliable measures for determining your own home’s price — he or she knows the subtleties of your home, neighborhood, and real estate market inside and out. Before you and your agent can confer, don’t get your heart set on a sale price.
Speaking of: The sale price is one thing. Potential profit is another.
How much money you’ll pocket after selling your home depends on a number of factors, including the amount of debt you still owe on a current mortgage, property taxes, and your real estate agent’s commission. To get an idea of your potential profit margin, use a net proceeds calculator, like these from United Heritage Credit Union or Oklahoma’s Credit Union.
Again: These are only estimates. A lot of variables are at play between the time you set a sale price and the time you close. The home will be appraised and inspected, and those results could affect your out-of-pocket costs or the sale price. And you’ll likely be negotiating the price with buyers. So use a net proceeds calculator with some care.
OK, you’ve done your research. Now it’s time to find that listing agent who’s right for you.
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Check out homes for sale in Miami. Contact Ralph Magin, your trusted real estate agent, at 305-741-2142 or visit http://ralphmagin.com/ for real estate inquiries.