Contrary to popular belief, it’s not always location or condition or marketing. The number one reason why an otherwise attractive home does not sell is price, and homes that are grossly overpriced often never sell at all.
The single most important factor to consider when selling your home is pricing it correctly.
The truth is it doesn’t really matter how much you think your home is worth, nor does it matter what your agent thinks – the only opinion that matters is the buyer who makes an offer or the buyer that never makes an offer.
Pricing homes correctly is both an art and a science. It involves comparing similar properties that have sold, making adjustments for the differences, tracking the market direction and taking stock of the present inventory, all in an attempt to determine a range of value, an educated opinion. The same way an appraiser evaluates a home, there is no hard and fast “price tag”, but it is an educated estimate and the market will ultimately dictate the price.
Homes sell at a price a buyer is willing to pay and a seller is willing to accept.
In a sellers market, where prices are appreciating & inventory is tight, pricing reasonably above the competition, (1%-5% depending upon the market trend) can work. In a buyers market however, as we’re in today, pricing correctly from day one and ahead of the market is important to garner the highest price possible before the market moves away from you.
We frequently hear sellers say, “I can always lower my price but I can’t raise it”, The truth is the market will adjust your price. As an example; If your home is priced too high you may have a lot of initial activity and interest, but no offers – a clear signal you missed the mark on pricing.
If it is too low, your home will receive a lot of attention and a few offers fairly quickly, creating a scenario where buyers are competing; improving their offer thru price and or terms, in a Buyer’s Market, this strategy can actually drive the price up.
We all believe our homes are worth more for a variety of reasons, that’s human nature. The key is to be realistic, recognize what homes are actually selling for, not just listed for.
There a Three General Pricing Strategies; you should know what they are and decide which is the right strategy for you.