Setting the right list price when selling
Pricing your home is both a science and an art. Achieving the optimal price is the result of objective research into comparable properties a gut feeling about your property and the current market.
The right price should:
- Attract buyers
- Allow you to earn the most money possible
- Help you sell as quickly as possible
What really matters is how your home stacks up against the other homes currently offered for sale and the onces that have recently sold in your neighborhood. Buyers will be comparing those to yours. (see our home staging tips to maximize sales price)
It is important to remember that, although the price is set by you, the value of the home is determined by the buyer. Try to avoid allowing your enthusiasm impact your better judgment - overpricing is a common mistake that can cost you in the end.
Common Reasons for Overpricing
- Purchasing in higher-priced area
- Original purchase price too high
- Lack of factual data
- Bargaining room
- Move isn't necessary
- Assessed value
- Emotional attachment
- Opinion of family and neighbors
Dangers of Overpricing
- Most of the activity on your home will occur in the first few weeks. Pricing a home properly and then creating immediate urgency in the minds of agents and buyers is critical.
- Buyers who have seen most available homes in their price range are waiting for the "right house" to come on the market. That's why if a house is priced right, it will sell quickly. The buyers are there waiting for it.
- Don't start with a high price and the assumption that you can reduce it later. By the time you decide to lower the price, it may be too late, as interest will have already waned.
- A major cause for concern is appraisal problems; overpricing can lead to loan rejections and lost time.
- Even if your home is nicer than other homes in the same area, your house won't be picked for viewing if you set the price too high.
- Buyers and agents become aware of the long exposure period and often are hesitant to make an offer because they fear something is wrong with the property.
- Attracting the wrong buyers.
- Fewer potentially qualified buyers will respond.
- You might help sell similar homes that are priced low.
- You could lose money as a result of making extra mortgage payments while incurring taxes, insurance and unplanned maintenance costs.
The Role of a Real Estate Agent in Pricing
An experienced Real Estate Agent will provide you with a comparative market analysis (CMA)- a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMA is performed by comparing previously sold homes in the area, and currently active homes to know your competition.
The agent you choose should also keep in touch with market trends in your area. Is the market on an upswing or is it weakening? Time of year and other factors can come into play when pricing as well.
The market determains the value...together, you and your agent will determine a price.
Other things a professional agent will handle
- Determining Marketing time
- Exposure method
- Financing options to offer
- Estimate your net proceeds
- Help to determine offering incentives.
- Determine a marketing stratagy
To get started- find out what your home might be worth in your current area by clicking here