Pricing Your Home to Sell
- Listing at the Best Price To Sell
The most critical step in preparing to market a home is determining the listing price. Naturally one wants to realize the highest return from the property. It is obvious that pricing a property under market value cannot provide the highest return. It is less obvious, but true, that pricing a property over market value will also produce less than the best return. The right price produces the best result. With a proper market analysis, you will be able to see the value in your home compared to others’ in the marketplace.
- Appeal to the Herd Mentality.
Given the high stakes of real estate, a buyer doesn’t want to be the only one interested in a house. By pricing your property on the lower end of the value range, you could stimulate interest among more than one buyer and create a herd mentality. Also, if you’re under the gun to sell quickly, this would be a good option.
- Listing Close to Market Value
Listing close to market value will allow you to get the best possible price in a short time on the market.
- Listing Above Market Value
Your home may stay on the market for a while and potential buyers may think you are not serious about selling your property. Buyers today are more educated about Real Estate and know market value. You will ultimately end up reducing the selling price. Overpriced homes help sell similar properties in the neighbourhood that are priced at market value.
- Listing Below Market Value
Be careful, you may get what you ask for! By undervaluing your property you get the buyers attention, but you will usually end up getting market value or scaring off those who don’t want to be involved in a bidding war.
- Price it to be found in real estate searches
Most buyers tell their agent they want a three-bedroom home in a certain neighborhood under $XYZ (or some other dollar amount). Their real estate agent may then set up an automated buyer search in their local database for properties under $XYZ. But if a home is listed at $XYZ=$1,000, that buyer will miss it. So, if your list price is higher out of the gates, you may miss a segment of buyers.
While this scenario happens frequently, many savvy agents will set up search parameters for their buyers to include properties listed a little bit more above their price ceiling. Knowing how flexible home prices can be, buyers should be made aware of properties that could be a good match for them, even if those homes are above — but within reasonable range of — what they want to pay. Often times the buyer can offer under the list price, or the property will get reduced.
- Pricing is an ongoing discussion
Ultimately, listen carefully to your agent’s pricing strategy. It’s their job to know what works and doesn’t. And as with any strategy, be prepared to have an ongoing discussion about pricing with your real estate agent.
Pricing a home isn’t a “set-and-forget” procedure. A lot of factors can come into play when selling or buying a home, and not all of them can be anticipated. If you can be flexible and react quickly to changing market conditions or new information, you’re more likely to get the best price with the least aggravation.