4 Ways to Price Your Home Like A Pro

Your home is a major investment in time, money and memories, so understandably, selling it can be an emotional process.

It’s important to lean on your REALTOR® for guidance. After all, this person is your go-to industry expert who is invested in helping you sell on your timeline and for the best possible ROI.

Still nervous about the pricing conversation? We’ve created four pro tips to help you through this process.

1. Higher Isn’t Always Better

Be strategic in your pricing and don’t list too high – that could scare away potential offers!

The longer your house sits on the market, the less likely you are to get your asking price. Buyers are more likely to negotiate a deal on a house that’s been listed for a significant stretch of time. A price-to-sell strategy will give you leverage, options and exposure to potential buyers.

2. Know The Local Market

How did similar homes in your neighborhood sell? These comparables (also called “comps”) play a big role in your own home’s price.

Your REALTOR® should run the average sale price for homes in your area. When selecting comps, REALTORS® generally filter properties within a one-mile radius of your home that sold in the past 90 days. Comparable homes will be similar in age, location, square footage and number of bedrooms/bathrooms.

Based on these results, they’ll pinpoint the differences and assess why price reductions did or didn’t happen. This nuanced understanding is invaluable, particularly when measuring the unique aspects of your home.

3. Upgrades Don’t Always Mean More Money

Buyers want a home they can:

  1. Picture themselves in, and;
  2. Easily make their own.

Help spark their imagination with neutral updates. Upgrades based on specific taste can sometimes devalue a home based on personal buyer taste and preference.

For example, just because you spent $40,000 to update your kitchen doesn’t mean you get to add an extra $40,000 to the listing price. Research from the National Association of REALTORS® states you might recoup 59% of your costs, based on the national average of kitchen upgrades.

Talk to your REALTOR® about what you can do, or have done, that positively affects your home value and listing price.

4. Keep Your Emotions in Check

Don’t let pride, sentiment and nostalgia mislead you!

According to the National Association of REALTORS®, the wrong price can drastically delay your sale. That “fresh factor” tends to wane after just 30 days! Therefore, it’s important to listen to your REALTOR® about your pricing strategy.

Their unbiased perspective combined with knowledge of the market and real estate inventory will help you walk away from the closing table feeling confident in your transaction.

5 Financial Questions To Ask Yourself Before Buying A Home in Chicago

Finances are typically the most intimidating part of the homebuying process. So, here are five financial questions to ask yourself so you feel as empowered as possible.

#1: How Are Your 4 C’s?

Let’s look at loan eligibility or “buying power.” Most lenders evaluate a person’s buying power based on four elements called “the four C’s.” They are capacity, capital, collateral and credit.

Before you buy a home, make sure you are well-versed on the status of or know where and how to check on these.

  • Capacity: This is your ability to take on a mortgage or pay back a loan. Income, savings and monthly debt payments are some of the factors that affect capacity.
  • Capital: This is the amount of money or savings you have readily available. Think of it as your personal reserves that are not tied to income. Closings cost funds and your down payment funds are types of capital!
  • Collateral: When you take out a loan, this is the monetary value of the property you’re securing against it.
  • Credit: This is based on your credit score and history. A lender wants to know if you have a history of paying other debts on time and in full.

#2: Who’s On Your Team?

When you’re ready to buy a home or begin planning for a purchase in the future, assemble a team of professionals who will have your back and provide expert counsel. They include:

  • A Lender
  • A Real Estate Attorney
  • An Inspector

#3: What’s Important To You In Your Home and Neighborhood?

Begin creating a list of home and neighborhood features you consider non-negotiables.

For your neighborhood, rank access to public transportation, parking, green space, retail and restaurant density and proximity to schools or hospitals. Depending on what you prefer, this will narrow down building types located in neighborhoods that include your must-haves.

For example, several neighborhoods in Chicago are known for specific architectural eras. Bungalows, two-flats, greystones and courtyard buildings all require different financial considerations when it comes to maintenance.

For your property, consider cost-associated expenses like central AC, laundry, elevators, private outdoor space like porches or backyards and parking garages. It’s easy to just think of the desired number of bedrooms or bathrooms, but these aren’t the only features that will influence the cost of the properties that will fit your needs!

Once you have your ideal neighborhood and home in mind, you can begin to get an idea of home prices in those areas.

#4: What if…?

Look at your financial ability to handle emergencies, life changes and other “what if” situations. Build an untouchable emergency fund with at least three to six months of monthly expenses shored up.

Not only will this give you a peace of mind when you buy your home, it will also boost your capital and likely positively influence your buying power.

Don’t wait to ask yourself what if! Take charge of your finances with these hypotheticals.

#5: Where Do You See Yourself Five Years From Now?

Take a zoomed out look at your professional and personal goals, then apply your housing needs to these milestones. Do you see career changes or promotions in the future?

It may be to your benefit to consider a property with more space than you presently need, because you anticipate having children or getting married. Does the neighborhood you like now sound like it will still be enjoyable to live in or fit your lifestyle growth?

It may also be to your financial benefit to wait at least five years for your home value to increase or for you to build equity or ROI on your investment. When in doubt, ask your REALTOR® what kinds of life milestones in their experience influence home purchase decisions.