Pricing Your Home For Sale
Finding the right price for your home is both an art and a science. Achieving the optimal price requires not only objective research into comparable properties but also having an intuitive understanding of what buyers are willing to pay in today’s market.
In the end, the right price should:
- Reflect your property’s unique appeal;
- Attract a wide range of buyers;
- Take into account the surrounding community and market conditions;
- Help you sell your property quickly and efficiently.
The simple fact is: price is the number one factor that most home buyers use to determine which homes they want to view. It’s important to remember that although the price is set by you, the true value of your home is ultimately determined by objective considerations such as the surrounding market.
The Importance of Proper Pricing
Properly pricing your home sets the tone for everything that follows in your tailored marketing plan. If you price it too high, many buyers may not even bother to make an offer, and you may not get the price you desire if your home sits on the market for too long. On the other hand, if you price it too low from the start, there’s a risk that buyers will assume something is wrong with the property, or you risk selling for a lower price than your home’s true value. Additionally, a price set too low or high could attract a number of potential buyers who could be challenging to deal with in negotiations or financing.
Proper pricing will lead to:
- A faster sale and smoother escrow;
- Exposure to more qualified buyers;
- More interest and traction for the property;
- Highest possible value for you, the seller.
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, and so should you.
Common Reasons for Overpricing
Sellers often make the mistake of wanting to overprice, or overvalue, their home due to the improvements they’ve made, or they compare it to homes that their prospective buyers likely would not compare against. They might also base their pricing on their home’s original purchase price, while not taking into account current market conditions - which are far more influential in setting the right price. Others overvalue their home due to emotional attachment or pride. While this is understandable - we’re all human and experience strong connections to the places we live in - it can be a mistake that only hurts the seller in the end.
There are many reasons for overpricing, but some of the most common ones include:
- Purchasing in a higher-priced area;
- Higher assessed value;
- Emotional attachment;
- Opinion of family and neighbors.
At the end of the day, pricing your home should be based primarily on the data and research presented by your agent after having properly and thoroughly observed the current market conditions and comparable homes that have recently sold in your neighborhood.
The Role of a Real Estate Agent in Pricing Your Home
Your real estate agent can help you determine the best price for your home based on a combination of comprehensive research and relevant expertise. They can provide you with information to help you assess your home’s value in comparison to other comparable homes within your neighborhood, as well as the recent sales of those homes.
This is when your agent will provide you with a comparative market analysis (CMA), which is a comparison of the prices of recently sold homes that are similar in terms of location, style, and amenities. A CMA presents you with previously sold homes in the area, and currently active homes, so you can better understand not only your competition, but your agent’s position on pricing and strategy for your home as well.
In addition to providing a CMA and advising you on the “art” of pricing, your agent will:
- Keep a pulse on market trends and stay up to date with market activity;
- Market your home to the largest number of potential qualified buyers possible;
- Create a strong initial demand, which can ultimately lead to better offers and closing prices;
- Estimate your net proceeds;
- Help to determine offering incentives.
Ready to find out what your home is worth?
If you’re ready to find out what your home is worth, one of our expert real estate agents can provide you with a free comparative market analysis (CMA) to help you determine the best price for your home and design a marketing plan to quickly get your home the best offer possible.