Pricing you home correctly from the start plays a big part in getting top dollar for your home.
Deciding on your home’s list price is easier said than done. A good real estate agent will recommend a price range, but should never decide the list price because that decision is wholly up to the seller.
Although sellers aren’t required to price according to inventory levels or the market condition, It’s a good idea to discuss inventory levels and market conditions with your agent early and often to make an informed decision on listing price. It’s not imperative to price the home according to these factors but here are some things to consider when choosing your listing price.
Discuss price reductions before listing
If you aren’t highly motivated to sell your home, time is on your side. If there aren’t many relevant recent comparable sales, the market value of your home could fall within a broader range. If you want to try for a higher price then do. Be sure to monitor buyer traffic to see how the market’s responding.
If you do try the higher end of your home’s price range, talk with your agent and decide a set amount of time before you will drop the price. Perhaps the price reduction can be used as a marketing tool to get more buyers in the to see the home. At this point you will know that the higher price did not work.
Pricing low…..doesn’t necessarily guarantee multiple offers
We’ve all heard about sellers who received multiple offers and/or sold their homes for over the asking price. We can’t, however assume it will happen to you, too. Just because your neighbor received multiple offers within a week does not mean you will.
Sometimes the homes that receive multiple offers are purposely priced low to stimulate that activity. These home are typically in good locations and in excellent showing condition. Just be careful when deciding to list your home low. You may just have to take that price. Sometimes sellers will raise their list price several weeks into the listing. This practice is a turnoff to buyers.
Looking for a quick sale?
Agents don’t want to see your home sitting idly on the market. They understand that homes that go weeks or months without many showings will ultimately sell for less than if they had been priced correctly right from the beginning. Your agent represents your interests in the marketplace, both to other agents and to the buyers they encounter. A good agent will educate you about the current market and will agree to support your higher price strategy if that’s what you want to try, but agree to have a price discussion after some time on the market.
So what’s the real market value of your home?
The true value of your home is what a qualified buyer is willing to pay for it. This can vary greatly depending on the robustness of the market. It comes down to the simple adage, supply and demand.
If the home sells within a few days of listing, chances are you listed too low. If months go by without any action, you’ve listed too high. A home that is priced right will get some steady action. If you receive second or third showings from multiple buyers over the course of a few weeks, you’ve likely priced your home correctly.
Once you have an accepted offer or a signed contract, there will likely be negotiations after inspections are completed. Buyers will come back and ask for credits or fixes when they feel they’ve paid top dollar for the home. A true sign of a well-priced home is one where the seller and buyer negotiate up until the end of the transaction.
If you plan to sell your home, talk about pricing with your agent early on. Keep the dialogue going as you diligently check out listings online, go to open houses, and evaluate the competition for several weeks before listing.
Getting on the same page with your agent about the pricing and marketing strategy should give you a pretty accurate idea of the sweet spot to price your home for sale.