Thinking of Listing Your Home? Things to Consider
The Value of Pricing It Right! (and the perils of pricing too high or low)
When thinking about what price to place on a home for sale, let’s start with some facts:
• Market value is what lenders (and their appraisers) care about, and Market Value has
nothing to do with the list prices of homes actively on the market.
• Price it too low and you will unnecessarily leave money on the table.
• Price it too high and you risk not attracting the right buyers. The home will be competing with other houses that offer the buyers you are attracting more of what they expect to find in that
▪ When a house can’t effectively compete, it lingers on the market accruing Days
On Market (DOM), creating the assumption that there is something wrong with
the home – thus reducing number of showings and the sellers’ negotiating
▪ The right buyers will miss the house on their searches because it will fall outside
of their search parameters.
▪ If an offer is received, there is a high probability the house will not appraise for
the sales price, jeopardizing the potential buyer’s financing and their ability to
complete the transaction.
What about the investments made in the home? Updates vs. Improvements, and effect on value -
It is important to understand the differences between an “update” and an “improvement” in the
eyes of an appraiser. Many updates are also issues of maintenance. Some updates may indeed
add value, but not as much as improvements will add.
Updates may be necessary to ensure the salability of a house to make it competitive in a hot
market – like fresh paint or replacement of a failing HVAC. Updating a kitchen by replacing
Formica counters with Granite and painting old cabinets would be valuable updates in today’s
But an Improvement would be something added to the house that wasn’t there when seller
bought it. Using the kitchen example, an improvement would be renovating the kitchen with
modern cabinetry, granite counters and installing new redesigned lighting. Other examples of
improvements would be the addition of a sunroom or finishing a walk-up attic, as both add new
square footage to the house.
Buyers love to see a new (or newer) roof, and that can improve the appeal of a house – make it
the better choice if an otherwise equal competitor has an older roof. But in the eyes of an
appraiser, a roof is a necessary component to a house, and replacement of an old roof is seen as
maintenance. It is not an improvement unless the roof is replaced with a different, more
upgraded material that enhances its function. Improvements add new value, whereas updates
are freshened up existing features.
Here is how I can help -
I help my sellers to price their homes wisely to attract the right buyers by using the same
methodology that an appraiser will use. I choose recently closed, very similar (age, style, size,
location, etc.) properties located within the same neighborhood and/or within a close radius.
I adjust the values of those sales prices to bring them in line with the features offered by my
client’s home. I share those comps and their features with the seller so they have clear
understanding of the results - a tight range of values that helps them see where their home best
fits into the market.
If my seller is curious to see what their home’s competition would be at a different price point, I
will take them on a tour of homes in that range so that they can see how their home compares.
I hope this is a helpful resource for you. Please feel free to contact me if I can be of service, or if you have any general real estate related questions I can answer for you!
2395 Kildaire Farm Rd
Cary, NC 27518-6689