Unless you’ve been living under a rock, you know the Northern Virginia Real Estate Market is on fire. We’re in an extreme seller’s market despite battling a global pandemic.
If you’re selling your home in the next few months, you may want to list your home higher than the Comparative Market Analysis produced by your real estate agent during your listing consultation.
Before you take this advice, look at the numbers in “your market”. There are a few criteria I like to use when preparing my clients for listing their home over market value.
What is “your market”?
Explaining the definition of “your market” now will make the rest of the article easier to digest. Two criteria are involved in determining “your market”.
Geography is the first and Sameness is the second.
Don’t think “neighborhood” when you think Geography. Geography for real estate purposes has more to do about comparable properties than location. If an appraiser can not find enough comparable properties in “close proximity” to the subject property (your home) the geographic area will be expanded until enough properties are found.
That’s why it’s important to review the Comparative Market Analysis your agent produces at your listing consultation. Confirming the location of the comparable properties is as important as the sales price.
Now let’s talk about “Sameness”. This is just another word for comparable properties.
Comparable properties are properties that are similar to the subject property, also known as your house.
So, what does this mean?
Single-family houses are comparable properties for other single-family houses. Townhouses are comparable properties for other townhouses.
You’re probably starting to see the pattern.
Once we determine the geography and sameness, we can answer the following three questions to determine if raising the price above market value is the right strategy for your home.
- What was the List Price to Sales Price Ratio for home sales near the subject property in the past 30 to 60 days?
- What is the average day on the market for properties near the subject property?
- What contingencies are being removed from offers of previously sold properties?
After you answer these three questions ask yourself one final question.
What is my risk tolerance?
Sure, every home in your community could’ve sold above list price and with zero days on the market. Doesn’t this make you wonder if some of these sellers left money on the table by listing their properties too low?
If you don’t want to leave any money on the table, your risk tolerance is high, and listing at a higher price may be the ideal strategy for you.
If you’re happy with the original number on the CMA produced by your agent, your risk tolerance is low and it’s probably better for your peace of mind to list at that price and leave a little money on the table.
Are you planning on selling your home in the next 30 days? Before you hire a real estate agent, check out my closing cost calculator to understand how much money you’ll be spending selling your home. Here’s the link to the calculator.