With a real estate market where many buyers are competing for homes, short supply of homes leading to high prices, you might think it’s smarter to list for a higher price. Experienced real estate agents and sellers know that pricing a home right from the start is crucial when selling. Many homes languish on the market because they aren’t priced competitively.
What happens when you try to list at a high price is that buyers get discouraged by the price and check out the next property. By the time you bring the price down, the home has stayed too long in the market without a buyer. Hence, any sane buyer will think there is something wrong with the property and thus offer a low price for the property. This is why it’s really important to learn how to price a home to sell.
TIPS FOR PRICING YOUR HOME TO SELL
What should determine the price of your home? Is it how much you paid for it? How much you have to pay on the mortgage? Or is it how much profit you want to get? The truth is, the major factor when it comes to pricing your home is the market. If you price high in a slow market, you will get fewer calls. And if you price too high, even in a fast market, buyers get discouraged and your home will stay long in the market.
When the price is concerned, establishing that all important asking price is a science and an art, and there are several things you should consider.
- Study past sales. Get an idea of what comparable homes are selling for in your area by studying past sales. You need to look at recently sold homes in your area that are similar to yours and note what they sell for. There is no use reinventing the wheel when it comes to setting a price on your home and testing the waters doesn’t always work. You might end up losing money rather than gaining.
- Do not confuse active listings with past sales. Active listings are not sold. They are just your competitors. It is important to be aware of price competition, but this is often just an indication of what your home will not sell for.
- Study your market. When you’re in a slow market, prices really determine sales. Starting with a high price to bring it down later may in a market where home values have really appreciated, but if prices in your area are down, you can quickly find yourself chasing the market and costing yourself money. If the market is stable? Your home will sit long. Buyers pay in today’s dollars, and time is not always on your side.
- Leave some room for negotiation, but don’t try too hard. No seller needs to feel he left money up for grabs, no buyer wishes to overpay. Your price should give both partiess room to deal, but if it’s too much, you risk being regarded as unrealistic, and potential buyers will go over to the next house.
- Think like a buyer. What are the things you cherish in a home? Is it a sizable yard, an updated kitchen or a view? These are the same things that your buyer values as well likely. Speak to your agent about current buyer trends. Yesterday’s green shag carpeting is today’s granite kitchen counter.
The house facing the interstate is likely to be a tougher sell than the one with a hill view. Your price should echo how your home compares to others offered on the market. Purchasers will see objections to any home, as none is perfect, but objections can quickly fade away when the home is priced right and reflects the buyer’s interests.
- Act fast. If your house has stayed on the market for some time, you don’t need to wait for a sign from heaven. Adjust the price as quickly as possible when you start receiving feedback that your home is priced too high.