How to put a price on your house?
Selling your property, and frankly any form of similarly big change, can often cause lot of stress, but as once wisely stated by ex-British Prime Minister Benjamin Disraeli, “change is inevitable” and often an opportunity for new beginnings. If you are struggling to navigate the complicated world of finance and decisions involved in selling or renting out your house, you have come to the right place. Here are some steps that will help you to assess the value of your house and guide you through the decisions involved in putting a price tag on your property. It doesn’t have to be stressful!
Firstly, you must consider the total cost of selling your house. This may include: the cost of marketing, conveyancing fees, the cost of any agents, lender fees and so on. However, whilst this may be slightly off-putting to think about, these aspects are all crucial for your success and will allow you to make an informed and calculated decision when selling your house. Read on, as we outline everything to make things simple and straightforward for you.
Conveyancing fees are the money you pay a solicitor or licensed conveyancer to transfer the legal ownership of the property from one person to another, and is required for every transaction of property and real estate purchase. You should budget between $800 – $2,000 for conveyancing.
Marketing is another critical aspect of selling a house and probably requires the most attention in this process. As a vendor, you must cover the cost of all the marketing of your property, whether through agents or the for sale by owner method; you’ll need to get boards and listings on different real estate websites.
While agents may have experience in advertising, this is not always enough to guarantee a successful sale. On top of often excessively high commission rates, the average marketing plan costs between $6,500 and $8,000. The average commission rate is around 2.5%, resulting in another payment that’s often $10,000 minimum.
For some people who are looking for a less expensive alternative, selling privately may be a more practical and efficient option, such as through No Agent Property, as it doesn’t cost any commission at all and often the marketing fees are a fraction of what agents charge.
Furthermore, when selling privately, such as through No Agent Property, you are provided with full control over the whole process and are involved in all the important decisions that are made along the way. Moreover, selling your property privately provides a huge advantage, ensuring owners like you can have face-to-face contact with potential buyers and can establish a more personal relationship between the buyer and yourself. This is often a huge factor in the success of selling your property as it has been scientifically proven that face-to-face marketing is much more productive and more likely to yield results as opposed to online interactions. Will an agent managing multiple properties at once always have time to speak to a buyer in person? Owners selling privately are only selling their own property and have a vested interest in their own sale. Based on a 2018 study 2018, it was discovered that after having face-to-face interactions, consumers were 85% more likely to purchase or buy from the seller.
Lastly, if you have a mortgage on the property you are selling, you must be prepared to pay an early exit fee to your lender, with the process usually costing between $150 and $1500.
You should consider all these factors before working out the value of your property, as spending less on selling, will mean more return. Moreover, taking these factors into consideration, you will be able to establish a minimum price that you would be willing to sell your property for.
From there, there are many options available to properly evaluate your house and calculate its value, in accordance with the current market values.
There are many ways to value your house, whether it be through a free online ‘house valuation’ calculator or a valuation done by a professional valuer. Agents generally cannot offer a valuation, but can offer an appraisal, which includes an analysis of comparative sales. You can often still access these when selling privately, particularly if you go through a company like No Agent Property. However, if you’d like to first do some of your own research, the things worth looking at may be:
- Finding similar listings
Pricing your house correctly is one of the most crucial aspects of selling your property. While vendors can set any price for their house, it doesn’t necessarily mean that people will buy it. One way to set a price for your own house is by looking at active listings of houses that are being advertised online, and comparing prices. To evaluate whether the listings are comparable, look at the location of the houses and make sure they are within at least 1/2 km radius (or perhaps more for rural areas). Moreover, compare houses with similar square footage and features.
- Looking at sold comparables
By looking at similar houses that have been sold, you will be able to compare the original list prices to the final sales prices to get an idea of the price reductions that you may have to factor into your marketing over the course of the campaign to sell your house.
- Market dependent pricing
Compare the last three comparable house sales in your area and base your price on this information. Depending on the current market value of real estate, you may be able to add 10% to or reduce 10% from the comparable house sale. What you set your price to initially can always be adjusted later depending on the market trends and is often not the price at which the property is eventually sold at.
It is important to take the time and diligence to properly value your house, and have reasonable expectations of the potential buyers, depending on the market trends. Be well-informed as to how much you will need to spend and how much you should expect to gain in return.
We wish you every success in selling your house and your future endeavours. If you have further questions, feel free to get in touch with an expert by calling 1300 850 855.