You Want How Much for Your House?

17 High Tides Lane, South Kingstown RI sold before print over asking price. Courtesy of Kathy Kourakis, Mott & Chace Sotheby’s International Realty

In real estate, as with most things in life, timing is everything.  You’ve been thinking about selling your house after seeing the astronomical prices your neighbors’ homes have fetched over the past 3 years.  But now you’re ready and the market has shifted.   So, what’s the right price?

First the bad news.  The days of “aspirational pricing” are gone.  There is more inventory in most markets, so buyers don’t need to be fiercely competitive right now.   Of course, good houses that are priced well are still attracting multiple bids, over-asking prices and favorable terms.   But that’s now the exception rather than the rule.  Be that seller and you are golden.

So, how do you know if your house is “priced well?”  Sales of comparable homes, aka “comps”, are always going to provide the most current and accurate pricing guidance.  The most reliable comps are the ones that have sold within the last 90 days in your immediate neighborhood.  Adjustments are made – plus and minus – for size, number of bedrooms, condition of house, amenities, etc.  Not only will buyers’ agents use the comps in crafting offers; lenders will, too.

Buyers who are financing will be required to obtain an appraisal for their bank/lender.   Even if a buyer is willing to overpay for a house, a lender is only going to finance what the comps suggest is current market value.  Your neighbor’s house that sold last month may a good comp; the one that sold last year likely won’t even be considered.  If an appraisal doesn’t come in where it needs to, the buyer usually has the option to kick in the extra cash.  But, more often, they’re going to come back to the seller for a price adjustment.  If a seller is not willing to negotiate, the appraisal is an “out” for buyers who’ve written that into their purchase & sale agreement.

None of this means it’s a “bad time to sell.”  In fact, there are lots of cash buyers out there, and we are nowhere near the exorbitant mortgage rates of 20 years ago.  Lenders are offering good, creative products, including ARMs.  And most buyers aren’t expecting fire sale prices.

Michael Mosca is a real estate agent specializing in coastal RI properties with Mott & Chace Sotheby’s International Realty in Narragansett, Rhode Island.  If you’d like guidance pricing a home to sell or buy:  Michael.Mosca@mottandchace.com or 917-287-0950