One of the biggest decisions you’ll face when it comes time to sell a fire-damaged house is what price to sell it at.
In this short article, we are going to take a closer look at the factors you need to consider when trying to determine how to price a fire-damaged house.
By keeping these things in mind, you’ll hopefully be able to set a more accurate price and sell your house faster and for a better amount.
1. Cost of repairs
The first thing you’ll need to know when determining how to price a fire damaged house is how much it costs in total to repair the fire damage.
If you are attempting to sell your fire-damaged house “as is,” then you can skip this.
On average, fire restoration services for a partially fire damaged house cost anywhere from $4 to $7 per square foot, i.e. $800 to $93,000 with most homeowners paying somewhere between $3,200 and $25,000, according to the latest statistics.
Those same statistics say that restoration costs for an entire home most often exceed $100,000. The average cost for fire damage restoration nationally is around $12,000.
2. Area home sales prices
Once you know the cost of the fire damage repairs, the next thing you will need to consider when determining how to price your fire damaged house is what similar houses are selling for in your area.
There are a number of different ways you can do this.
You can work with a local real estate agent and have him or her run a comparative market analysis for you. This is the process where the agent gathers data on recently sold homes in your area that are in a similar price range as to what our home will most likely be in.
The information obtained by the agent is referred to as your home’s comparables or “comps.”
If you don’t want to work with a real estate agent, there are also a number of tools online that you can access and use – often for free.
You could also drive around the area and check out similar houses that are for sale and get their asking prices.
Whatever you decide to do, you should start getting this information several weeks before you put your fire damaged house on the market.
Please keep this in mind: Zillow recommends that you set the asking price for your home within 10 percent of the average sold price in your area. Unfortunately, this will be different for owners of fire damaged houses – we will talk more about this later on.
When setting the average sold price, be sure to only look at homes similar to yours that have sold in the past three months as this is the time period that appraisers will look at.
3. Talk to your real estate agent
After gathering the information on sale prices for nearby homes, it will be time to sit down and discuss pricing with your agent. If you are not using an agent, you will need to do this with a spouse or possibly by yourself.
Remember, setting the price too high for a fire damaged house could result in your house taking much longer to sell. On the other hand, setting the price too low will take money out of your pocket.
A good real estate agent will be able to recommend a good sales price for your home. However, if you think the recommendation is low based on your prior research, don’t be afraid to push back.
The truth is real estate agents often have an incentive to price a house lower so that it sells faster and they can get their commission and move on to the next house.
For this reason, ask questions and be sure you understand the agent’s reasons for setting the house price at the amount they recommend.
4. Don’t forget to account for the fire!
This is important: when setting the final sales price for your home, you must keep in mind that most buyers won’t even consider purchasing a house that has been damaged in a fire.
For this reason, you are most likely going to have to reduce your asking price in order to draw any attention to your home.
When selling a fire damaged house, you need to be prepared to accept a lower price and for the process to take longer than what it would for a similar house that hasn’t suffered any fire damage.
5. Pick the right number
There is a rule of thumb that says when selling an item, including a house, you should not use a price that ends in zero.
According to this line of thinking, a number with a zero at the end invites buyers to negotiate on the price. So it would be better to price a home at say $259,000 instead of $260,000. However, it is not considered better to load the number with 9s. So $259,000 would be better than saying $259,999. Many consider the latter type of number to be “off-putting.”
Of course, as with most theories, there is a contrary school of thought that says that using all zeros could be beneficial when listing your house online to sell.
Here’s why: most real estate listing sites use zeros when setting the parameters for their searches.
This means that a house priced at $400,000 would appear in searches for both $300,000 to $400,000 and $400,000 to $500,000. If you used a price of $399,000 or $399,999 your home would only appear in the $300,000 to $400,000 search.
We only mention these strategies for your consideration. You’ll have to decide if you want to subscribe to one or the other when it comes time to price your home.
Avoid the stress and frustration of selling a fire damaged house
If you want to avoid the stress that comes with trying to sell a fire damaged house in today’s real estate marketplace, a great alternative option is to sell the house directly to We Buy Fire Damaged Houses.
The company buys your house “as is” so you don’t have to worry about costly repairs eating into your sales price profits.
We Buy Fire Damaged Houses also pays all cash so you can get your money fast.
To learn more or to receive an offer on your fire damaged house, fill out the short form below.