Pricing Your Home: 3 Reasons To Do It Right The First Time
Pricing your home to sell is like walking a fine line. As the homeowner, you want to get as much for your house as possible. On the other hand, you don’t want to turn away potential buyers by asking too much or cheat yourself by asking too little. The quest is to find the right price.
What Is the Right Price?
The question then becomes, “What is the right price?” This is a number that is comparable to other similar homes selling in your market. This number will reflect an accurate value of your home and is best determined by a real estate agent. Your agent understands the market and can help you determine a fair asking price.
Be sure to listen to what they have to say because starting with the wrong asking price can be costly in the end. In fact, here are three reasons why you need to be sure to figure out the right price from the start.
1. Attract More Buyers
It is not uncommon for sellers to overprice their home with the idea that they will reduce the price when they find an interested buyer. The problem is that an overpriced home will keep some potential buyers from every looking.
For instance, if your home is worth $199,000, buyers with a $200,000 budget will see your home and take a look. However, if you price it above the value at $214,900 knowing you will reduce it, buyers will skip your house because it is above their budget.
By stating the right asking price for your home, you will increase the number of buyers that see your home. Remember, the more buyers that see your home, the faster it will sell.
2. Faster and Higher
This brings us to the next reason to price your home correctly. As a seller, you want to see your home sell faster and for the most money possible, right? Pricing your home right can do just that.
If the market is hot, especially if there are more buyers than homes (known as a seller’s market), pricing your home correctly can produce multiple offers. When a buyer sees a fairly priced home, they will jump at the chance to own it. The more offers you have, the more likely you are to sell the home for more money. This situation often produces bidding wars that escalate the price higher than your initial asking price.
If the market is cool, with more homes than buyers (known as a buyer’s market), pricing it right is even more important. An asking price that is too high will sit on the market for weeks without any offers. Eventually, you’ll have to lower the price after having wasted a lot of valuable time.
Not only will you waste time, but you will likely get less for your home. Research from the National Association of Realtors shows that when a house is on the market for a long period of time, the selling price continues to drop. If you price too high, you may end up making less on your home than if you’d priced it right the first time.
3. Buyer Confidence
Pricing your home too low can also cause issues. Buyers are typically savvy in terms of market prices. They know what other homes are selling for, so if they see a home listed significantly below others, they assume the worst. What is wrong with the property? Why is the homeowner selling so low?
Offering a fair price helps a buyer feel confident that they are getting a good value and that there are no secret issues with your property.
Pricing Your Home To Sell
The best way to price your home is to look at the homes selling in your market. Your real estate agent will do a comparative market analysis (CMA) with information from their database of recent sales. They will look at homes that are similar in size, age, and amenities. Additionally, their analysis will include:
- How long the homes were on the market.
- Whether the homes sold for listing price.
- Current market conditions.
- Current interest rates.
When it is time to sell your home, you need to price it correctly from the day it hits the market. When you do, you’ll give yourself the best possible chance to sell your home quickly and easily.