11 Sep Price Your Home to Sell in the San Antonio Market
Get the Asking Price
Right the First Time
Of all the tasks you must complete before you list your house on the market, the most critical one is to price it where it needs to be so that potential buyers see the price, verify that the home is in good shape by walking through it, and don’t freak out about the price you are asking.
If the price is too high, they will immediately focus on cheaper houses that offer similar features. If the price is too low, they might wonder what is wrong with the house. Either way, it’s hard to stay on a buyer’s A-list if you aren’t priced right.
Your Home’s Value to You
Sometimes an item of sentimental value – your grandmother’s wedding ring, for example – is actually valuable in the real world. Other things you value highly – like the t-shirt you won at the hotdog eating contest – is only valuable to you. It’s important to examine your sense of an item’s value from a neutral, unemotional point of view if you want to sell it for a fair price.
When you first decide to look into selling your house, your mind will immediately go to the memories that were made there, and the amount of effort, TLC, and money you’ve put into taking care of it. There is a temptation to over-price based on your feelings about the house. Similarly, if you have bad memories of the house, you might have trouble seeing its value to others.
That’s when you need the help of a neutral third party to look at your home as a commodity, not as an heirloom.
Its Value to Everyone Else
When a buyer arrives for a showing and walks through your home, they are generally looking for reasons not to buy your house. They usually have a list of homes that are for sale, and they want to narrow it down to a very short list of finalists.
As a seller, it is your job to eliminate the typical reasons a buyer might cross your house off their list. The properties on their list were likely chosen because they meet the buyer’s general criteria (like size and number of bathrooms) but they wouldn’t make the cut if these houses were not in the buyer’s price range.
When the buyer knows how much you want for the house, they will walk in the door and evaluate everything about your house to decide if it is really worth the price you are asking. If your house is the best they’ve seen for the price, you have a serious potential buyer on your hands!
Leave the Emotion Out of It
No matter how much you love – or hate – your house, selling it is just a business deal. It is a transaction, just like buying groceries or selling your old guitar and amp. In order to get your listing price right the first time, you need to take a cold, calculating look at your house and try to see it the way potential buyers will see it because, in the end, buyers have the final word on how much your home is worth.
You have to take your memories, feelings, and knee-jerk reactions out of the equation. Getting help from your real estate agent is great because an unemotional, uninvolved expert can generally do a better job of predicting how potential buyers will react to the property and the price.
Metrics Your Realtor® Uses
to Compare Properties
Comparing properties is called “comping” in realtor-speak; the houses being compared to yours are called “comps”. The tried-and-true approach great realtors® use for comping a home relies on four ingredients:
- Understanding trends and activities in the Texas real estate market
- Ability to do deep-dive research similar homes and their listing prices or price when recently sold
- Thorough knowledge of San Antonio and its surrounding communities
- Experience reducing the exercise to something of a mathematical formula
With these four ingredients baked into the cake, your realtor® will generally look at six factors about your house that they can use to compare it to other houses.
The Age of Your Home
Even if your home is a haunted house from the 19th century, it doesn’t mean that it has less value just because it’s older. If it has been cared for and updated every few decades (including recent remodeling in the kitchen and bathrooms), it may be more valuable than a brand-new house that is the same size – unless it is situated on a lonely hill with intermittent power outages and drainage issues.
New homes appeal to buyers who feel that there is an advantage in being the first owner. Certainly, the owner can choose the final features of the home according to the money they want to spend on higher quality features. The downside is that newly built housing developments tend to have only very small trees and the houses have a similar look and feel as you drive through the neighborhood – lacking the personality of older neighborhoods.
Homes in certain age groups are likely to need major work. Currently, homes built in or before the 1980s are regarded with suspicion that the plumbing and electrical systems need to be completely updated. If you have an older home with all of the maintenance and updates complete, your house will shine among others the same age.
Taking age into account is step one in the formula. An older, updated home may be considered to be comparable to a newer home – on an apples-to-apples basis.
Your Location in Greater San Antonio
You’ve heard it – “location, location, location”. The most beautiful home in San Antonio can be a disaster to try to sell, if it is a 20-minute drive just to get to the freeway that takes you on another 20-minute drive to the downtown area. Conversely, a beautiful home located 10 blocks from the River Center in the heart of downtown may be hard to sell if the front porch is 100 yards from Interstate 10.
In the same way, a home that is a “fixer-upper” located near downtown in a neighborhood full of trees and well-kept yards might fetch a surprisingly high price.
Your neighborhood is part of the sale when someone buys your house. The appearance of the neighborhood is the first thing a potential buyer sees when they arrive for a showing of your home and can be a boost or bust to your home’s perceived value.
Beyond the outward appearance, buyers look for access to things they care about – such as bicycle paths, grocery stores, bus routes, and parks. There are also things they don’t want to see – such as six lanes of noisy traffic that cuts through the community, a trash-burning power plant nearby, or finding that the area is zoned for chickens, goats, or bee-keeping.
A great neighborhood can offset the fact that your house is kind of small, and a dirty, smelly neighborhood can cancel out the great features of a home. Using the neighborhood as a metric for comparing properties means that you can compare two houses in very similar neighborhoods.
Size matters, but it is not the most important factor in setting the listing price for your home. Your Realtor® should be an expert in comparing your house to similar houses recently sold and currently on the market, so you can set the right asking price from the beginning - and avoid delays in getting the home sold.
The Size of Your House
To the novice, it seems reasonable to say, “The average price per square foot of houses sold this month in my neighborhood is $100; so my 2,500 s.f. house is worth $250,000.” Not so fast – there’s more to it – a lot more.
The average price per square foot tells you how the value of homes in your neighborhood stacks up against home values in other neighborhoods, but it does not predict the amount of money you will get from your buyer.
The size of your home is important because buyers usually start by looking at houses with a specific number of bedrooms and bathrooms and a specific minimum size. This means that you need to make sure your price is competitive with other houses in the same size range, and not a lot higher or lower.
Upkeep & Updates
Upkeep refers to the condition of your home. A property is considered to be in good condition if repairs and preventive maintenance have been done on a timely basis. This is a good thing! If your water heater is on it’s last legs and the A/C is acting up, you will probably need to reduce your expectations of getting top dollar on the sale.
Updates are remodeling projects in old areas in the house. Sometimes updates are a logical part of repairs, as happens when the shower area has to be torn up to replace leaky plumbing. You really can’t re-use the old tile, so it makes sense to replace it with tile that is popular at the time of the repairs. An update can also be purely cosmetic – like taking down the 1970’s avocado green wallpaper in the kitchen and replacing it with textured paint and trendy splashbacks.
Upgrades are remodeling projects that make the house better – like adding onto the home so the master bathroom will accommodate a big jacuzzi tub. Replacing old kitchen appliances with higher quality equipment is another example of an upgrade.
When you are getting your house ready to go on the market do not, do not, drop an enormous amount of money in upgrades and updates without discussing it with your realtor®. It is very rare that a seller increases the amount people are willing to pay for their house so that it covers all of the money they put into the updates. A swimming pool in the back yard may make your house more attractive to buyers and may help get your home sold quickly, but if you spend $30,000 putting in a pool, it will only increase the real value of your house by a few thousand.
Stick with remodeling and painting that makes sense for the purpose of selling your home. Your real estate agent should have a very good understanding of what buyers in San Antonio are looking for, and can advise you on which projects are likely to give you a return on the investment.
Current Market Activity & Trends
This is the most important aspect of pricing your house before you put it on the market. Knowing whether it is a buyers’ market, a seller’s market, or in-between will give you insights into what the competition is doing about pricing – now and in the coming weeks.
Keeping up-to-date on local and regional events that affect San Antonio – such as the announcement of the new Tesla factory in Austin – really helps when you are deciding on the pricing and timing of listing your house; it might even give you an edge over other sellers who are not as well-informed.
The bottom line: Price you home right from the beginning so you can avoid changing your listing price down the road. Don’t drop your asking price unless your real estate agent can convince you that it won’t make you look like an amateur or give the impression that you started out being too greedy. Even if it’s not true, a price change may put out this kind of negative signal to potential buyers. Even worse, don’t raise your price unless your agent feels strongly about it.
Sometimes, a price change is unavoidable. A sudden collapse in the oil market can trigger panic, and you will be in a better position if you react quickly, reduce your listing price, and get your house sold before there is a glut of properties on the market. By the same token, if there is an event that creates an upsurge in buyers, you might do well to (cautiously) raise your price to take advantage of the new market trends.
DIY vs Professional Analysis
of Your Comps
Yes – you can do your own comps – comparing your house to other homes on the market. You can spend some quality time with Zillow.com or Realtor.com, looking for houses that seem to be similar to yours and check the listing prices.
However, unless you have access to the real-time information that real estate agents can get, you won’t get the whole picture; and unless you have real estate experience, you may not have the knowledge to look beyond the obvious in your pricing strategy.
Real estate agents in San Antonio get frequent updates throughout the day on changes – properties newly listed, listed homes that have gone under contract, and sales completed, along with juicy details that are not publicly shared on the internet.
Even if you have some of the necessary skills, you are better off getting the unemotional, fact-based advice of someone who literally does property comps every day – and who has their finger on the Texas real estate market’s pulse.
In San Antonio, pricing your home to sell quickly while maximizing the amount you receive at closing can be tricky. However, there is a science behind successful pricing that can help you avoid the delay of setting the price too high to attract interest and having to drop the price later.
You must make the final decision on the listing price of your home, with the advice of a trusted agent. Your realtor® should be experienced with the science of pricing strategy so they can lay out the options for you and give you sound advice. That’s what I call…
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