So, you’ve decided to sell your home. Congratulations!
As you know, you’re facing a tidal wave of decisions, from selecting a real estate agent to choosing any last-minute repairs or projects (a fresh coat of paint never hurts!). These choices can help you to reach your goal, to sell your home.
Keep reading to discover one of our secrets for successful home-selling: pricing your home correctly.
The secret to success
Here’s the one thing you need to know about how to price your home: don’t over-price it.
From a buyer’s perspective, there are many factors to consider. Hint: it’s not all about “location, location, location.” The driving factor typically comes down to price. No one wants to over-pay, even in a seller’s market.
Our best advice is very simple and straight-forward. If you want to sell your home, your chances are better if your home is fairly priced, right away.
To decide on a fair price, from the beginning, it’s wise to consult a real estate agent to guide you through the process and land on a listing that will lead you directly to your main goal—to sell your home. We’re here to help.
Price it right, from the start
When selling a house, the most activity happens during the first few weeks. Showings, research indicates, decrease the longer that a home is on the market. Though some people think that setting the price high initially and being willing to go down with time is the right move, it might be a greater disservice to you to go this route.
Pricing your home correctly, at the right price initially, ensures that your house is compared favorably with your competition. This is especially important as showings are at their peak, and you can get more interested buyers in the door.
For example, when a buyer is looking at houses, they tend to see more than one house at a time. If your house is expensive enough for them to rule it out, they probably won’t check back in a few weeks to see if the price has changed. They’ll move on with their search, and will have probably made an offer on a different home by then.
Lower price, faster sale
According to the National Association of Realtors, the longer a house sits on the market unsold, the less money a seller will get for their house. Buyers tend to get a greater discount from the original asking price if the home goes unsold for some time. After 24 weeks on the market, the average buyer will save just over 15% of the asking price.
The best way to combat this is by asking a reasonable price upfront and making your home competitive on the market.
Myths of Pricing
Sellers tend to enter the home-selling process with preconceived ideas of why their house should be priced a certain way. These reasons include:
- The original purchase price. It’s important to realize that as a seller, you likely paid market value. Realistically, the market is always changing. It helps to drop that expectation and go into the sale with a clean slate.
- Improvements. Around the house projects, while nice, often tend to be under the “maintenance” category that preserves the value of a house rather than adding to it. This is a good reason why improvements should be made for enjoyment as the end goal, rather than resale.
- Need for money. Needing the money from a sale, like in cases where a seller plans to move to a more expensive area, doesn’t have any correlation to your home and how it should be priced.
- Personal attachment. Regardless of how much you love your home (as you should!) and how good it was for you and your family, this doesn’t affect how much money it should be sold for.
Pricing your home to sell
When working with your real estate agent, you’ll come up with a plan to price your home to sell, myth-free, using their mix of professional resources and expertise.
One of the first methods will be reviewing comparable homes. Your agent will supply you with a Comparative Market Analysis (CMA) to review, compare, and contrast similar homes in your area. This is a helpful compilation of recent sales to guide the process.
They will also help you price your home for the current market. Many local factors will play into your price point, including seasonality and inventory. Is it a buyer’s, seller’s, or neutral market? They’ll guide you through.