Deciding to rent or sell your property is a big deal, and to set your asking price is the next most crucial step. Whether you are a real estate agent or not, setting the price is something that cannot be, nor should be taken lightly. This mini guide will help you through the process of deciding the optimal asking price for selling and renting as well.
Sale comparison approach
Sales comparison approach (SCA) is one of the more popular methods for estimating the value of the real estate. It is a rather simple approach in which you compare similar properties that have rented or sold over a specified period.
Price per square foot is a metric that is commonly used in this method. For example, if a 3,000 square foot townhouse is rented for a $1/square foot. So if you have a townhouse in the same area, that’s how much you can get.
The only downside to the SCA is that it’s a pretty generic approach. Each house has its specifics and uniqueness that isn’t taken to consideration with this approach. Then there are the buyers and renters that have specific tastes and preferences. That too can influence the price as well.
On the other hand, the sales comparison approach is perfect for setting a baseline, a starting point to reach the real value of your property.
Talk to multiple real estate agents
Real estate agents know the property market and can almost instantly give you an estimate. If you find the time, talk to a couple of real estate agents over the phone, or invite them to check out your property before they give you an estimate. Talking to them doesn’t obligate you to do to anything; you get to hear what they have got to say. Later you can decide if you wish to hire some of them. But in the meantime, you can use their insights to value your property.
Ask friends, colleagues, neighbors, or even interested buyers for an offer
This is all about crowdsourcing and getting a glimpse in the minds of others – what they think about your real estate and how they value it. The more people you ask, the better. The chances are that some, if not all of them, at one point of their lives have been involved in buying or selling real estate. By asking them, you will be able to leverage their experience and knowledge.
Combine all of the wisdom from above
That’s the best way to finally get to a number, whether it is for renting or selling. Put all on paper and the price will present itself or at least a price range will. If you can’t make up your mind, then start at the highest rate. It’s not like you can’t change your mind and lower the asking price. On the other hand, a low asking price may attract interested parties, and you could sell or rent your property before you realize that you could have gotten more money.