There are only three methods for pricing your home the right way.
Today, I will discuss the three pricing strategies and how to price your home properly. Whenever it's being listed, it is your listing agent's job to get you the most money for your house in the shortest time. Market value is what a house will sell for on the open market under normal conditions. Remember that during the pandemic, when prices were crazy and offers were multiple, those were not normal conditions. It is vital that your agent knows the current market conditions and the market area to know what type of listing strategy will work best for you. They must have comparable homes in the same proximity as your home to compare with a comparative market analysis along with a detailed marketing plan. There are three common methods to price your home to sell:
1. Over market value. This is not a good idea. Sellers will say to me, “Let's price it high and see what happens.” This strategy is rarely the best option. Buyers are very informed these days and savvy. They have all the tools at their fingertips and the internet to find out the actual value of a home as well as the agent they're working with. The agent has comparable properties and is also keeping them apprised of the market conditions. If you price your house high, you will end up chasing the market, and many times you end up selling your home for less than you would have if you had priced it correctly.
"Your listing agent's job is to get you the most money for your house in the shortest time."
What does it mean to chase the market? You will have to continually lower your price to reengage the consumer's interest. Worse yet, your home will sit too long, and the buyers will ask, “What's wrong with this house? Why has it been on the market for so long?” Sellers may feel safe taking this option, but most of the time, they regret their decision.
2. Fair market value. When you price your home at market value, you are placing your home in front of the most qualified pool of buyers. The serious ones, both agents and consumers, will recognize the home is fairly priced and will be eager to see the inside of your home, yielding you more showings quickly in today's market. This strategy will get you an offer in just a few weeks, if not a few days, and it could still bring in multiple offers if it is a great listing.
3. Lower than market value. Everybody loves a bargain. When you price your home lower than market value, you tell potential buyers, “Hey, come and look at this house. You don't want to miss out on this great deal.” Most people think that the lower price tag will drive more traffic and eventually end up in a bidding war for their house. This strategy is more likely to be effective in a seller's market like the one we just were in.
Pricing a home is one of the most important aspects of selling. The best thing to do is have a conversation with your listing agent about your selling goals and timeframe so that you can craft a strategy that works best for you in your situation. If you have any questions about the current market or how to sell your home for the most money in the least time, or if you would like to get a copy of our marketing plan for free, please reach out to us. We would be happy to serve as your resource for all of your real estate needs, so call or email us anytime.