When you go to sell your home you generally start out by asking one question. How much do I price my home for? Its a simple question but when you start asking around through realtors and investors alike you can get a wide variety of answers. So how do Realtor and Investors price homes and why can they be so different?

Both Realtors & Investors start the pricing process by using the multiple listing service (MLS) or sites like it to compare your home to similar homes that have recently sold. The estimated value of your home is determined by a number of data points such as it's square footage, the number of bedroom, the condition of the property, and recent home sales usually within a mile of the home.  Now that you know the basic structure of your home pricing lets dive deeper into how home pricing is set.

Realtors all learn the same way when it comes to pricing your home. They all start with the Comparative Market Analysis or CMA as its known in the industry. A CMA will follow a number of steps to determine the correct pricing of your home. This process involves pulling "comps" or homes that are similar to the subject home that typically have sold within the last 90 days and some Realtors will try to get as close to the subject home as possible.

For a comp to be pulled it has to meet a number of factors like

• Similar Square footage ( within 500 sqft if possible)
• Similar Lot Sizes (within 1000 sqft)
• Similar number of Bedrooms
• Similar number of Bathrooms
• The overall Condition of the property
• Within 1 mile of the subject property

After filtering through these criteria a realtor will then take the pricing from about 5 to 7 properties that match as closely to the subject property as possible to get an average pricing per square foot. Once they have the average pricing per square foot they then multiply that number with your homes square footage to get your homes pricing.

If for instance you were wanting to sell your home for $250,000 but the comps are coming back with $200,000 then you will need to find distinct differences between your home and the comps. The most common differences can be as simple as granite countertops or even wood flooring but always keep in mind that with a realtor you have to consider the end buyer and their thoughts on the house. 

Investors follow a very similar path of realtors. Though I cannot speak for other investors I know when I look at homes I start with a site like Realtor.com to get an idea of home prices in the area and following the same factors as a realtor but there is one portion that makes investors different from realtors

When looking at the home to buy we specifically look at the overall condition of the home with a fine tooth comb. Once we have an idea of the necessary repairs that we will have to do to your home we can then start looking at something called "After Repair Value" also known as ARV. ARV takes multiple other factors into account for instance.

Lets say your neighbor has the exact same house as yours, the only difference being a few upgrades made over the years. Let's say it has granite counter tops, fresh paint, new roof, and put some nice hardwood floors. Now let's say last month he sold his house for $300,000 with a local realtor.

Now lets say we bought your home from you, did the same upgrades as your neighbor. Your After Repair Value is now $300,000.

The main point with investors is this number once they have that they can formulate their all cash offer. Of which include taking the total costs of repairs, the investors selling costs, and the minimum profit to find your offer with can be read in more detail here. Additonally there are other benefits to selling to an investor the most common is fast close with as little as 7 days along with not having to deal with mortgage companies and sometime you can actually walk away with more money in your pocket then you would if you sold with a Realtor.

Looking to sell your home give us a call! We can buy your home fast with little hassle or overhead!