“Depending on how a buyer is made aware of your home, price is often the first thing he or she sees. As a result many homes may not be shown because they are discarded by prospective buyers for not being in the appropriate price range.”
When you decide to sell your home, setting your asking price is one of the most important decisions you will ever make. Depending on how a buyer finds your home, price is often the first thing he or she sees, and many homes are discarded by prospective buyers as not being in the appropriate price range before these homes are given a chance to be shown.
Your asking price is often your home’s “first impression”, and if you want to realize the most money you can from your home’s sale, it is imperative that you make a good first impression.
Because this is not as easy as it sounds, your pricing strategy should not be taken lightly. Pricing too high can be as costly to a home seller as pricing too low. Taking a look at what homes in your neighborhood have sold for is only a small part of the process, and this on it’s own is not nearly enough to help you make the best decision.
This report will help you understand some important factors about pricing strategy to help you not only sell your home, but sell it for the price you want.
PRICING STRATEGIES STARTS WITH GOOD INFORMATION
The prospective buyers who will be viewing your home, will conduct their searches in a similar manner. That means they will be comparing your home to, for example, brand new development homes, century homes, 10-20 year old homes, etc.
They will also consider locations such as homes in established neighborhoods, the middle of town, the suburbs or country properties. Each home will have a different look and feel and it’s quite possible that a prospective buyer might consider all of these variables in the search for a home.
You can see, when you’re selling your home, you’re not just competing with the home around the corner, but also with all homes in other areas which have the same basic characteristics: i.e. number of rooms, overall living space, etc.
HOW YOUR ASKING PRICE AFFECTS YOUR SELLING PRICE
There are 4 common strategies that most sellers use to price their homes. It is unwise to assume that a higher asking price will result in a higher selling price. Oftentimes, this equation works in reverse if you’re not paying attention to the market. Bear in mind the following research when setting your asking price.
- Clearly Overpriced:
Every seller wants to receive the most amount of money they can for their home, and real estate agents know this. If more than one agent is competing for your listing, an easy way to win the battle is to over-inflate the value of your home. This is done far too often, with many homes priced 10-20% over their true market value.
As a result, your home could languish on the market for months, leaving you with a couple of costly drawbacks:
- Your home is likely to be labeled as a “troubled” house by other agents, leading to a lower than fair market price when an offer is finally made.
- You will be greatly inconvenienced with constantly having your home in “showing” condition . . . for nothing.
About 3/4 of the homes on the market are 5-10% overpriced. There is usually one of two factors at play here: either you believe in your heart that your home is really worth this much despite what the market has indicated (after all, there’s a lot of emotion caught up in this issue), OR you’ve left some room for negotiating. Either way, this strategy will cost you both in terms of time on the market and ultimate price received.
Priced Correctly at Market Value:
Some sellers understand that real estate is part of the capitalistic system of supply and demand and will carefully and realistically price their homes based on a thorough analysis of other homes on the market. These competitively priced homes usually sell within a reasonable time-frame and very close to the asking price.
Priced Below the Fair Market Value:
Some sellers are motivated by a quick sale. These homes attract multiple offers and sell fast - usually in a few days - at, or above, the asking price. Be cautious that the agent suggesting this method is doing so with your best interest in mind