We make decisions every day, in every minute and moment of our lives. Some are simple – should I take the bus or train to work today? Some are seemingly insignificant – should I wear the red tie or the blue tie? Some are so obvious it hurts – should I have dessert tonight?
Yet there are the occasional few times in your life that give rise to decisions of greater magnitude and meaning. Making the move to buy or sell your home is one such example.
Thankfully, making this choice doesn’t happen every day. In fact, the average American lives in their home for approximately nine years before relocating, which is three years longer than the same estimate for 2008. This is good news as the process of listing, showing, and selling a home can be tedious and tiresome.
There are ways, however, to make it less so. One of those is by hiring real estate agents who have professional experience and training in the field. From setting an initial asking price to moving forward with escrow and closing the final deal, the best Realtor or real estate agent makes the entire process of selling a home look like a piece of cake.
Curious as to how they do it? Yes, it takes a fair share of firsthand experience and ample education. However, there are a few general commonly held practices and pieces of advice that nearly all real estate professionals adhere and ascribe to.
Here are five factors that smart, savvy real estate agents consider when listing a home or property for purchase.
1. The Competition
Realtors often first look to comparable homes in the area before settling on a listing price of a home. Where a home is located, the type of neighborhood it resides it, the nearby amenities and overall reputation of the community are all common factors that shape and affect the average cost of a home independent of the home itself.
Analyzing the competition by looking at the listing prices of similar homes for sale in the area, as well as recently sold homes nearby, offers a lot of pertinent information that Realtors use to establish your home’s initial price point. A successful real estate agent will also look at and compare various neighboring homes’ listing prices verses their selling prices as well as how long other homes were on the market prior to being sold. All of these considerations provide important information that a Realtor will use to determine your home’s asking price.
2. Market Trends
On a larger scale, Realtors also must look at the overall ups and downs of the industry at the time a house goes up for sale. For example, buying a home in the early half of the 2000s was vastly different from buying a home after the 2008 financial crisis.
Realtors look at what key components are affecting the market in your neighborhood, in your region, and in the bigger picture of the national market landscape. Factors both big and small help savvy agents seek the best listing price for your home, from rising interest rates to the general trends of home prices in your area.
3. Neighboring Homes
A magnificent multi-level mansion sandwiched between an overgrown abandoned warehouse and a cluttered junkyard, no matter how big or beautiful it is, will not garner the same asking price as a similar home located next to homes of comparable quality and stature.
On the other hand, a property of lesser value can be made more desirable if the neighboring homes are of superior quality and condition. In both cases, the nature of your home’s next-door residents shapes how they set the initial market price for your property.
The overall amenities that add to the surrounding community of your home also shape your real estate agent’s assessment of a property’s value. The availability to local businesses, schools, shopping centers, and public parks all add value to a home. Likewise, plans or proposals for the arrival of new companies or new and improved construction projects in the future also help inform listing prices. The more an area has to offer, the more value can be ascribed to a home in that area.
5. The “Perfect” Price
One of the biggest factors Realtors consider, or rather attempt to achieve, when settling on a listing value, is that perfect initial price that’s not too high and not too low. Overpricing and underpricing both frequently lead to lower final sale prices, so that first listing value holds a lot of merit.