Your initial list price can have a huge impact on your home’s final selling price. If you price too high for the market, your home could languish for months, forcing you to lower your price. It could be hard to attract interested buyers.
Price too low and you might end up regretting selling, wishing you’d made more money, a phenomenon known as seller’s remorse. Like Goldilocks’ porridge, you want your price to be just right.
Real estate agents have been employing these four pricing strategies for years to help homes sell quickly and maximize their seller’s profits. Here’s how they can help you sell your home.
Price Using Data
To a certain extent, your home’s price is subjective. It’s worth what a buyer is willing to pay. But you can get to a somewhat objective price by looking at what other buyers in the market have been willing to pay for similar homes.
A comparative market analysis is an invaluable tool when it comes to pricing your home. It takes all the data on recent home sales in your neighborhood, how long it took for those homes to sell, and whether or not the sellers had to lower their prices, to arrive on a range of values for your home. Your Clever Partner Agent will prepare one for you at no charge.
You should also consider your home’s size and condition when picking a price among comparable homes. A home that has double your house’s square footage will sell for more.
If you vastly overprice your home, it will sit on the market. It might not even show up in a potential buyer’s search. Even if they see that it’s on the market, a too-high price could imply that you’ll be difficult to work with during negotiations.
Remember that a buyer doesn’t remember what your kitchen looked like before the remodel, they’re buying the house as it looks now. They don’t have your fond memories of raising children in it and won’t know about all the work you did. Try to remove emotions from the pricing process for the best results.
Price below the Competition
Pricing your home below the competition is a strategy that can lead to great rewards. Everyone loves a bargain, and pricing below similar homes could attract more interest from potential buyers. It could even lead to a bidding war!
Undercutting on price creates more interest and a sense of urgency. Buyers will rush to come see your house because they don’t want to lose out on a deal. Why not price above the competition, assuming buyers will offer low? Because many people just won’t look at your house. Or they could worry that they’ll offend you with a lowball offer, so they don’t even bother.
What if you do decide to ignore this strategy and list at the maximum price you think your home is worth? Set time limits around your pricing strategy. If you haven’t had any showings in two weeks agree with your realtor to lower the price by $5,000. Commit to tiered pricing changes to avoid your house spending months on the market.
Don’t forget that the list price isn’t set in stone. If you attract more interest and receive multiple offers you could end up getting more for your house than competitors who started out a higher listing price. Discuss this strategy with your agent before deciding on a list price.
Price Based on Seasonality
It’s no secret that the seasons impact the housing market. Not many buyers want to move in two foot snow drifts, and families try to avoid moving during the school year.
Nationwide, the best time of year to sell a house is in late spring and early summer. There is pent up demand after the winter and homes show best. But markets vary from this average, for example, the best time to list in Chicago is the first two weeks of May — but the best time in Dallas is the first two weeks of July.
Timing the market can net a premium of up to $3,000 for your house, but it requires in-depth knowledge and expertise. An experienced agent will know the best time to list in your area.
Price for Online Searches
If you go onto any major real estate website, you’ll see that you can search based on price ranges. $300,000 to $350,000, for example. When picking a price for your home, keep these ranges in mind.
If your home is priced at $352,000, it wouldn’t show up in a buyer’s search results if they’d selected a maximum price of $350,000. Reasonably speaking, you probably would accept an offer of $350,000, but they might never find out about your house.
Pick a price that fits well within a search engine’s price range, so your home will always be displayed to interested buyers. Think about the psychology of pricing, too. Pricing at home at $247,000 or $244,000 rather than $255,000 implies that precision and thought went into selecting your price.
Local Clever Partner Agents have the knowledge and experience to effectively price a home that’s for sale and to help you get top dollar. Reach out to be connected with a Clever Partner Agent today!