2.11.2009

How to Determine your Austin Home Price


I am doing a lot of market analysis for clients this week...in fact, I have two more due tomorrow. A time consuming but fascinating process. (if you are me anyway) When considering your Austin home price, here is an overview of what should go into your decision.

First, it is your decision. You hired an Austin Realtor for their expertise and market knowledge, but ultimately, it is your house and your decision what price you want ask for your home. A good Austin Realtor will supply you with ample market statistics and arguments to support their price recommendation and help you with your decision.

Second, the buyer determines the sales price of the home. As the seller, you determine the list price, or the market position of your Austin home. Your goal is to position it correctly in order to attract buyers.

When I put together a market analysis for a client, I pull pricing for 3 active listings, any/all pending listings, 3 sold listings (within last 3 months), and 2 withdrawn/expired listings for comparable Austin homes by age, size, and neighborhood.

I take each comparable property's price, and add or subtract market value amounts for each feature the comparable property has or doesn't have in relation to my client's property. This creates an even playing field. (Note, this is also where it's important that you choose an Austin Realtor who understands your neighborhood and the market value of your home's unique features.) I then take all of the adjusted prices, throw out the lowest and highest, and come up with a price range for my client's home. My final price recomendation is somewhere within that range and based off of the home's general marketability, condition, staging, and overall aestetic.

Many sellers and Austin Realtors go by average dollars per square foot for a given neighborhood when determining the list price of an Austin home. However, in areas like central Austin where there is a great deal of variance between homes within a neighborhood, it is impossible to accurately price a home by dollars per square foot. For example, one 1930's, 1500 square foot home in Hyde Park may have 2 bedrooms and 1 bath, and its neighbor, also a 1930's home, 1500 square feet, may have 3 bedrooms and 2 baths! These two Austin homes simply can't sell for the same dollars per square foot. I personally take square footage differences between comparables and multiply it by 30-50% (depending on the neighborhood and degree of variation). I then use that amount of square footage to make a dollar per square foot adjustment in my pricing analysis. If you have a small Austin home but a great layout, this is a must do in your pricing analysis. It may earn you thousands of dollars.

Finally, the "acid test": Put yourself in the Austin home buyer's shoes. When they see this home pop up in an Austin MLS search, will the sticker price you have decided upon lure them in or turn them away? In this market, you can't afford to deter any potential buyers.
btw, if you have read this far... impressive. I thought I was the only one into this stuff.


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1 comment:

Noah Awl... said...

I’m very impressed. I always suspected an “executive dart board” mounted to my realtor’s dashboard. Just before walking to my front door; darts where tossed and an average determined my “asking price.” Apparently there is more to setting an asking price than I assumed. Apparently selling is more than just a sign in the front yard; it takes someone that knows your neighborhood. Thanks for sharing… Noah Awl…