Pricing your home right is crucial for an effective home sale. Getting the price right is the single greatest challenge for Sellers and their Realtors. Accurate pricing sets the tone for the entire selling process and is necessary for you to have a positive result.
There is no “magic formula” that will work for every transaction, but here are some common sense “Do’s and Don’ts” to keep in mind when setting the price for selling a home.
- What are your goals?
Developing a successful pricing strategy needs to be based on what you want or need to have happen.
- Do you have to sell quickly or will you hold out for top dollar? Consider this – there is such a thing as selling a home TOO QUICKLY which may mean that you are leaving “money on the table.” The more people who decide they want to buy your home, the more likely that the selling price will be higher.
- If selling quickly IS important – because you have already bought another home or have other urgent personal reasons for wanting to move quickly – it’s vital that your price is based on a speedy closing. Experienced Realtors can provide guidance on what the “buy me NOW” price” should be without sacrificing too much value.
- Do your homework
Researching the market in your specific areas will provide excellent information that will help you pick the right price.
- Pay close attention to comparable sales in your neighborhood and look for common trends. It’s always important to know what a home like yours in the same area was listed for – and what it sold for.
- Keep track of current activity in your neighborhood. Knowing the type and pricing of active and pending listings in your neighborhood will allow you to see how your home compares to the competition and price it accordingly.
- Be careful about too much analysis
It’s great to think in terms of what you personally want to have happen, BUT trying to use general information or your wants can be a big mistake.
- You really can’t base the price of the home solely on what you “need to get out of it.”
- What you paid for the house or have invested in improvements and repairs have nothing to do with value and no buyer will ever base an offer on those figures.
- Don’t use square footage as the sole basis for pricing or put too much emphasis on it
- First, the square footage is rarely accurate for most homes and being off a small about would have a major impact on your pricing.
- If you were off by $10 per square foot on a 3,000 square foot home, the total dollar amount would be off by $30,000.
- Never forget that your biggest decision is PRICE
Always keep in mind that pricing is the single most important tool in marketing a property and is the base of all other marketing tools.
- Don’t price a home too high – it will attract the wrong pool of buyers and lead to frustration for a seller.
- Don’t price the home too low – You will ALWAYS fret over the fact that you “should have gotten more for it.”
The Bottom Line
Taking the time to price a home correctly will bring the best results.
- If you’re not in a hurry, “right pricing” leads to competition among buyers, which puts upward pressure on the price and gives sellers more leverage to negotiate better terms.
If you need to move quickly, be smart and DON’T go too high or too low – long-time Realtors call it the “Goldilocks Solution,” not too high, not too low – just right!