ShareThisA number of factors go into setting a sale price and they aren't all location, location, location. Sellers consider improvements they've made, the original purchase price and how much profit they want -- or need -- to make. The market may say something else. Here are some of the factors that set a house price:
Economy. Just because your house was worth $500,000 in 2005 doesn't mean you can ask that price in 2009. The market won't bear those prices now. Listen to the advice of a Realtor or do a lot of homework pricing if you're going it alone.
Comparable sales. Often called "comps," this number reflects how much other homes have sold for in the past few months in your neighborhood. It may seem like comparing apples and oranges when a 1,000-square-foot bungalow is compared with a 4,000-square-foot behemoth around the block, but it makes more sense if you do the math. What buyers and Realtors look at is the price per square foot.
Amenities. Upgrades and extras, such as a pool, new roof or air conditioning, fireplace or a rentable apartment, can increase the price. But don't expect every home improvement project to increase your price. "You're not going to get dollar for dollar what you put into it," Realtor Heather Pourchot says. "What you put into it will help your sale." Kitchen and bath remodeling tend to have a good return on investment; pools do not.
Location. Yes, location does affect price, and that includes more than the neighborhood. A house on a busy street in a good neighborhood is likely to cost less than a similar home on a quiet street.
Seasonal influences. For the most part, the school schedule is what you should pay attention to. Families prefer to move before the start of a new school year.
Appraisal. It's foolish to set a price much higher than an appraisal, unless you're lucky enough to find a very interested cash buyer. Banks won't approve a mortgage for more than the appraiser thinks a home is worth.
(Distributed by Scripps Howard News Service www.scrippsnews.com)
Must credit St. Petersburg Times.
