Pricing Your Home to Sell: What Works Best
Accurately pricing a home is a critical component to gettting is sold fast
Pricing a home right from the very beginning is one of the most important elements in getting it sold quickly. Overpricing a property often leads to it sitting stagnant on the market, which inevitably leads to price cuts and the possibility of selling your home for far less than what you should’ve priced it at originally. But contrary to popular belief, a lot goes into properly pricing a home, and it’s something that most professional Realtors will say is a special kind of skill. So just how do I price Texas homes to sell, you ask? Let’s take a quick look below…
Appeal to the masses
Once listing your home, the ultimate goal isn’t finding just one potential buyer, but as many as possible. In some instances, listing a home at the lower end of a valuation range helps generate more interest, and possibly even a bidding war, ultimately bringing the final sales price closer to the higher end of a valuation range. In other words, as backwards as it may seem, strategically pricing your home for a lower price can sometimes lead to making more money.
Maximize visibility in real estate searches
Most home buyers will say they’re looking for a place “under [choose your amount].” When this is the case, a buyer’s agent will regularly send his or her clients new listings that fit their individual budget. So for example, if you’re hoping to get $400,000 for your home, why not price it at $399,999 so it’ll populate in real estate searches “under $400,000?” It makes sense, right?
Take everything into consideration
My pricing strategy is highly data-driven, meaning I’ll look at recent sales, other comparable properties currently on the market, and of course take any special features into consideration as well. Nowadays, home buyers have access to an incredible amount of information, which is also why it’s so important to also use this information as home sellers and price your home accordingly.
Work out a pricing strategy ahead of time
Getting the most amount of money for your home is just as much my goal as it is yours. But it’s also important for home sellers to be realistic with their expectations too. So just in case a home isn’t selling at its original list price, always have a backup plan prepared should things not go our way initially. Having an agreed upon price change after a certain timeframe will save time, and it also ensures a much smoother home selling experience if everything is already out on the table prior to even listing your home. Hopefully it never comes to this, but it doesn’t hurt to be prepared.
Pricing your home is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and 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
The simple fact is, price is the number one factor that most homebuyers use to determine which homes they want to view. And it's 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 to impact your better judgment - overpricing is a common mistake that can cost you in the end.
The Importance of Proper Pricing
- Faster sale and less inconvenience
- Exposure to more buyers
- Increases realtor response
- Generates more advertising/sign calls
- Attracts higher offers
- Means more money to seller
- Avoids being "shopworn"
What really matters is how your home stacks up against the others currently offered for sale and recently sold in your neighborhood. Buyers will be comparing.
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 alreadywaned.
- 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
- 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 CMAis performed by comparing previously sold homes in the area, and currently active homes to know your competition.
- There is no "exact price" for real estate
- We don't tell you what we think your home is "worth".
- The market determines value…together we determine the price.
- You determine the price based on the factors you control:
- Marketing time
- Financing alternatives provided
- Exposure method
- Keep in touch with market trends and keep up to date with market activity of comparable homes.
- Estimate your net proceeds.
- Help to determine offering incentives.
An agent has NO control over the market, only the marketing plan. Never select an agent based on price.