Before you place your home on the market, it’s essential to understand the importance of the price. Pricing is the foundation of a successful home sale. Regardless of a home’s condition, features, location, and market conditions, everything about the home will be reflected in the sale price. Pricing a home can be very emotionally driven, as you may have very fond memories of your home and possibly be inclined to over-estimate its worth. Or you may be removed from the local housing market and not understand the gold mine on which you’re sitting. Either position should be avoided. Buyers have always been savvy, and with the advent of the internet, they have more tools to use. But, so do you, so let’s see how you, the seller, can get the best price possible for your home…
Pricing a home should first consist of conducting a market analysis of recent (three to six months) home sales near and like your home. A smaller home next door to yours may yield a higher $/sq. ft. value than the larger one across the street, so it’s important to understand that your home may not have the same $/sf as a nearby home. Once a $/sf is determined, this value is multiplied by the size of your home to determine a suggested asking price. Adjustments can be made for condition, upgrades, special features, number of bedrooms/baths, etc. The asking price should consider the suggested range from the market analysis, current market conditions, and your selling goals. If you need to sell quickly, your home contains special features, your home is located near homes that sell in seven days, your roof will need to be replaced soon… all these should be reflected in your asking price.
Now that you have an asking price in mind, let’s go one step further and make sure it’s going to attract buyers. If your asking price is just above major price thresholds, such as $250,000, $300,000, $400,000, etc., consider dropping your price to just below the threshold. For example, list a home at $299,900 instead of $303,500. This will attract many more buyers who limit their search up to $300,000 listings. Plus, after negotiating, you may end up selling that $303,500 home for $299,900 anyway.
When you have the asking price right, your home will begin receiving showing requests because potential buyers like the photos and the price in the listing. But when you get lots of showings with no offers, that typically means something about the home has detracted interest, which could be a cluttered interior, odd home layout, a different condition than the photos depict, etc. But again, the price is the single most important part of the listing and will attract or deter offers. Even the best agent can not sell your home if it is priced incorrectly.
Many sellers mistakenly think that a home with several significant price drops makes the seller look desperate. If price drops are done rather quickly, it leaves the impression that the seller is just trying to find the right price, which is understandable. However, if the home has been on the market for months with no price adjustments, this is sometimes perceived as “something being wrong with the home” or a non-negotiable seller. Consider weighing the cost to keep your home on the market another month (mortgage/insurance/utilities payment/hassle factor, etc.) vs. dropping the price a bit.