Pricing your home correctly is the single most important factor in selling your home quickly and for top dollar. An overpriced home will inevitably sell for less than it could have as days on the market pile up and buyers begin to wonder what is “wrong” with the home. Here are several points to consider when pricing your home.
Study past sales. Past sales are the greatest predictor of what your home will sell for, and also what the buyer will study to determine what to offer. Study past sales in your area; none will be identical, but having a good understanding of true market value is the first step in determining your list price. A well-priced home will often draw multiple offers, driving the price up higher.
Active listings have not sold! They are just your competition. It is important to be aware of your competition’s pricing, but this is often just a look at what your home won’t sell for.
Do not overprice because you can “wait it out.” If the market is appreciating, this strategy may work, but if prices are declining or even stable, the home will just sit. You will eventually find yourself lowering the price and even “chasing the market down”, costing yourself money.
Leave some room for negotiation, but don’t overreach. No seller wants to feel money was left on the table, and no buyer wants to overpay. The price should give both sides room to maneuver. However, if the list price is too high, buyers can perceive the seller as unrealistic, and not submit an offer at all.
Put Yourself in the Buyer’s Shoes. Would you pay as much for a home on a busy street as one tucked in the middle of a quiet neighborhood? Neither would most buyers. Would you pay as much for a home that needs extensive updating as one that is fully renovated? Neither would most buyers. Be realistic about your home. Buyers will find objections to any home, as no home is perfect, but it is curious how quickly objections disappear when the price is compelling.
Listen to the Market. If your home is on the market and not being shown or is receiving multiple showings but no offers, you are priced too high. Don’t hesitate to adjust your price. Unless you are in a rapidly appreciating market, the news will not get any better over time.