Pricing Your Home for Sale
Pricing a home for sale is both an art and a science. Achieving the optimal price is the result of both objective research into comparable properties and a gut feeling about your property and the current market. Ideally, a home’s listing price will allow you to earn the most money possible in the shortest amount of time. But, before we begin, let’s debunk a few myths about pricing your home for sale.
MYTH: There is an "exact price" for real estate.
The simple fact is this: price is the number one factor that most homebuyers use to determine which homes they want to tour in person. Although the listing price of your home is set through a collaborative discussion between you and your agent, the value of the home is determined by the buyer. In other words, the home’s list price must be inviting enough to attract buyers while also aligning well with other homes that are currently for sale or have recently sold in your neighborhood.
MYTH: Because real estate professionals offer market analysis and reasoned advice on pricing your home, that means your home is only “worth” that much.
The real estate market determines a home’s value; together, we determine the price. To price a home properly, your real estate professional will have to study the local market, research comparable properties and consider current market conditions. This is called a comparative market analysis (CMA), which analyzes the prices of recently sold homes that are similar in terms of location, style, and amenities.
MYTH: I shouldn’t list my home for sale in the winter/spring/summer/fall because buyers aren’t looking to move.
While real estate professionals will most likely find agreement in the existence of a “selling season,” perhaps, it’s equally true that life’s unpredictability can bring about a necessary move sooner than we may plan. Job changes, family happenings, or financial occurrences can accelerate or delay a home sale, and so in reality, there is truly no “bad” time to list your home for sale.
That’s not to say, however, that you or your agent will be able to control a number of factors that affect the success of your home sale. For instance, you, nor your agent, do not have control over your home’s location, mortgage interest rates,or the economic conditions of the market. However, other factors, like the condition of your home, the most ideal time to list (if life allows for this!), and the methods to market your home are all items that you should discuss with your real estate professional.
MYTH: Even if my home is overpriced, a buyer will come along eventually.
There are numerous reasons that a home may be overpriced when it becomes active on the market. From needs-based reasons (i.e. “I need X amount to move) or the opinions of family members or neighbors to a bloated home assessment, overpricing is sadly common. However, that doesn’t mean that you and your real estate professional can’t price your home accurately to attract the right buyer sooner!
Keep in mind that most of the activity on your home will occur within the first few weeks of active listing status. Thus, pricing a home properly and creating immediate urgency in the minds of agents and buyers is critical. It’s important to be reasonable about the price you set. If your home stays on the market too long because it is overpriced, potential buyers may think that something is wrong with it, and you may end up selling it for less than what you could have gotten if you had started out with a realistic asking price.