Pricing Your Home

You have decided to sell your Hawaii home. Now here is the next step: How can you attract a buyer?

While location, location, location is important, the first thing buyers often search for is price. Even if the house is the perfect size with the right parking and view, if it doesn’t match a buyer’s budget, it isn’t an option.

Whether you have a real estate agent or are selling your Hawaii house by owner, here are the do’s and don’ts when deciding on the perfect price for your home.

DO research comparable homes in your neighborhood.

Open your computer and study past sales statistics for similar sold homes in your neighborhood. Comparable homes have the same number of bathrooms and bedrooms with about the same amount of living and land square footage.

While homes that are currently active are your competition, homes that have sold within the past three to six months can give you a better comparable market value. Once you have the comparable value, you can decide if you want to price it higher or lower than the comparable properties in your neighborhood. If you want to sell fast, you might want to price it lower. If you have more bedrooms, bathrooms, an enclosed garage, or larger lot, you might want to price a little higher.

DON’T price your home higher to simply make more money.

A higher list price will not always translate to more money in your bank account. A price that is right will assure it sells, but if your home is priced too high, it may sit for sale longer.

Buyers see the other comparable homes online, doing their own research and determining if the house is worth the month. Also, if you house didn’t have an immediate buyer, they may be wondering why it isn’t selling in the hot Hawaii housing market, as the days on the market data is also readily available to potential buyers.

Even if you do get an offer for a higher than comparable value price, an appraisal will reveal the true value, and if the appraisal is lower than the agreed upon price, the buyer may have difficulty getting financing.

DO reduce the price if you aren’t getting offers.

Every time a price is reduced, even if it is $1000, potential buyers looking in your price range will be notified through their online subscriptions. Reducing the price can cause a marketing buzz on a house that has been sitting on the market, which also might cause more offers to come in.

DON’T believe everything on the Internet.

With all the home value estimators online, like Zillow and Trulia, it is easy to get an estimate. While, these can be a starting point, these estimates are general numbers, but your home may or may not be worth that price. The house’s neighborhood, location, parking, steep hills, or other factors are not usually part of the online estimate’s value. Therefore, it is always more reliable to get your home’ value through a comparative market analysis, which most real estate agents provide for free.

DO accept the first offer if it is the right price.

Fast offers can be a good thing, especially if you priced your home right from the start. If you receive a full price or higher offer, don’t be afraid to take it. Especially in Hawaii’s very competitive housing market, it is quite common to have a bidding war within a couple days of listing on a house that was priced right from the start. Don’t hesitate to accept the first offer, if it is the right one, as when a home sits for longer, the price often goes down.

DON’T include the cost of renovations and updates, dollar for dollar.

Not all home renovations have a positive return on investment. The wrong project at the wrong time could cost more money and time than adding value to your home. And if you add every renovation dollar to the home price, it could cost you even more money as your house sits on the market. Certain home renovations, like new bathrooms and kitchens, will often add additional value, so it is best to speak with a real estate agent about increasing your comparable pricing based on home enhancements.

DO make reasonable counteroffers, if needed.

Remember: when a house sits on the market, it starts to become stale and suspicious. If you have an offer, don’t be afraid to engage the buyer and offer a counter that is closer to your price point. If you have multiple offers, negotiate to get the highest price.

With the right price, based on comparable homes in your neighborhood, you will be accepting an offer in no time.