How to Price Your Home on the Hill
This regularly scheduled, sponsored Q&A column is written by Tom Faison of ReMax Allegiance at Eastern Market. Please submit your questions via email.
Q. Sadly, after six years on The Hill, we are going to be selling our home near Union Station in early 2015. We are having a hard time figuring out a value based on recent sales. Our first home in Seattle was a six-year-old townhouse, extremely similar to neighboring homes, and very easy to price. In our current neighborhood, values range from $600,000 to well over $1 million, and all but a few seem to sell very quickly, though lately we’re seeing more places still available after the first open house than we did earlier this year. Where should our focus be as we look at recent sales?
A. Oh no, science and logic meet art and emotion … The scientifically logical part of my answer is pretty elementary, but for better or worse, residential real estate is not a logical business.
Typically, I can generalize the conditions of a market based on a steady plateau, incline or decline. This year, home sales on the Hill have been more up than down, almost hyperactively in certain neighborhoods and price categories. I suggest a diligent, real-time approach to your study of value, paying close attention to how quickly and how well nearby listings perform. If at all possible, view new listings as a buyer would, and try to be objective.
Most homeowners and agents look at the past six or even 12 months of home sales to determine value. In this market, I have tightened that threshold to home sales within the past three months due to the abundance of activity. In fact, when looking at a listing’s potential value, I pay more attention to current, active, or under-contract listing than to those in the past. The data benefit from the former is that you are seeing what the market was willing to bear for comparable properties, exactly how many days it took to go under contract and the ultimate selling price. Photos and description will also provide clues to comparability, but nothing beats an in-person visit.
The more scientific process I follow in order to establish my initial baseline price involves an initially broader scope of the time and location of comparable sales. I then fine tune with current and under-contract listings. I evaluate my baseline number against those homes currently for sale in the area, looking at active listings $50,000 above my number and $50,000 below my number. I then begin to adjust up or down based on features and location — appraisal 101. Lastly, and most logically, it’s important to take into consideration what I am experiencing with my own nearby listings, gauging in real time, based on my listing activity, the pulse of the market, the buyers, and yes, the agents, particularly at contract presentation time. This is where it becomes crucial to work with a local expert.
The second part of my answer, the non-scientific part? That’s a horse of a different color. Selling Hill homes is like selling art: often the frame is worth more than the piece. In my experience, while value is the first question on a potential seller’s mind, a nearly fail-safe path to success puts pricing further down in the order of business:
Shop for and choose your agent, no matter how far in advance of your sale. Establish together a logical but broad list price and sale price range. Commissions are a big expense, so why not put your agent to work early?
Frame the product, the timing and strategy. I’ve listed homes well in advance of our listing launch date, without an established list price, but with the goal of creating or enhancing the envelope that will be presented to the public.
Once complete, and only then, do you know what you’ll be selling in relation to what else is for sale.
Revisit the value ranges you established earlier. I’ve found more often than not, depending on the market climate, that potential list and sale numbers rise.
Finally, keeping strategy in mind, choose your list price, cast a broad exposure net and the rest will take care of itself.
We are so fortunate on the Hill, an architect’s candy store, but this doesn’t help the appraiser. The solution is easy though: if you’ve prepared the product properly, and price with your head, the hearts of your buyers will follow.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of HillNow.com.
