They Want How Much For That House?
Like many home buyers, you may have looked at a house and then felt very confused by an absurdly high or low asking price. Home pricing is determined by many factors. It’s important to gain some understanding before making that big purchase.
The Pace of Your Local Housing Market by Moment
Supply and demand in a neighborhood can change very quickly and will impact the price of homes for sale. Many homes up for sale in the same neighborhood usually can mean a lower asking price. Fewer homes for sale over a longer period of time can mean a higher price tag. Is there a reason many people may be moving out of an area at the same time? It’s definitely something to ask questions about.
Location, Location, Location
The specific location is crucial when it comes to pricing. A smaller home could have a higher asking price than a larger more updated home just three blocks away. But why? Take a look around. Is the traffic worse and is there more noise around the larger home? Is the smaller home assigned to a better school district? Maybe the smaller home has better access to public transportation as well. These are all important things to figure out.
The prices of similar homes in the area are also known as the “comps”. Realtors look at data to do a comparable market analysis to come up with pricing. They look at similar homes in the area and come up with numbers based off of what those homes sold for.
All of the Extras
Amenities of the home also play a role in determining pricing. Home buyers prefer a newer build over an older one. New windows, high ceilings and updated appliances also appeal to home buyers. Retailers moving into the neighborhood can also impact the home value. Starbucks, Trader Joes, and Whole Foods have shown to cause an overall increase to nearby home values throughout the past decade.
Local housing market, location, comps and amenities are four main factors that impact the asking price of a house. Figure out what is most important to you and what a home with those qualities is going to run you. Instead of feeling extreme “sticker shock”, you will be more mentally prepared for the asking price of the type of home you are looking for.
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