Coming up with the “right” price when selling your home is a balancing act. You want to ask as much as possible…but not so much that you turn away potential buyers. However, you don’t want to cheat yourself with a price that’s lower than your home’s worth.
Your emotions also have a great effect on the price you list your home for…almost all homeowners overvalue their home because they know what a great home it has been for their family. Unfortunately, buyers don’t have those same feelings…and ultimately the buyer is the one that sets the price that the house will sell for.
The “right” price is one that’s in tune with what similar homes are selling for in your market.
The “right” price is one that the buyer feels accurately reflects the home’s value.
To help you arrive at a price, your real estate agent should show you comparable recently sold homes (in the past three –six months) and any comparable pending sales. This information will help you evaluate the market in your area. Please take their advice and resist the temptation (that all home owners feel) to overprice your home.
A recent article from Consumer Reports, lists overpricing your home as the most costly mistake you can make when selling your home. “If you price it too high, it will just sit on the market, agents will stop showing it, and buyers will assume there’s something wrong with it,” says Jeanette Cook, a real estate agent in Burlingame Hills, Calif., a suburb of San Francisco. “You may have to drop the price far below what you think it is worth just to entice people to look at it again.
Here are the three reasons to price your home correctly from the start:
- YOU CAN ATTRACT MORE BUYERS
Some sellers may be tempted to ask for more than market value — even if they’re willing to accept a lower offer — just to see if there are any takers at the larger number. But this strategy of “testing the market” can backfire if sellers price their home out of range of potential buyers.
Say your home is worth $499,000 according to your real estate agents market research, and you’re willing to sell for that amount. But you list at $515,000 just to see if anyone makes an offer at the higher price. A serious buyer may have a budget of $499,000 and so search online listings only for homes priced through $500,000. That buyer may not even see your home unless you lower your asking price. It’s better to price your property right from the start to maximize the number of qualified buyers that will look at your house.
- YOUR HOME WILL NOT LOOK AS GOOD AS THE OTHER HOMES AT THE SAME PRICE
With home photos online, it is easy for buyers to compare ALL the homes for sale at your price point –and if the competition has granite countertops, more bedrooms or baths, or other amenities that your home doesn’t then buyers will feel that your home is overpriced when compared to the other homes they are looking at that have these features.
The overall size, amenities, and condition of your home when compared to other homes in the immediate area will have a direct effect on the price a home will sell for in today’s market.
- WHEN YOU SELL YOUR HOME FASTER, YOU WILL SELL IT AT A HIGHER PRICE
In a hot market with many buyers, a fairly priced home could receive multiple offers because people recognize it’s a good deal. But an overpriced home could scare away some of those buyers, who may think that they’re dealing with an unreasonable seller.
It’s even worse in a cooler market (one that has fewer buyers). You may be willing to sell your home for less, but a buyer may not even bother to make an offer if the home’s overpriced from the start.
Buyers know if they want to purchase the home when it is fresh on the market, when a lot of other buyers are also looking at the home, they need to bid close to the asking price…in fact the majority of homes that sell in the first 2 weeks sell at, or close to full asking price.
Studies by both the National Association of Realtors and the Real Estate Staging Association show that homes that are priced right from the beginning sell for MORE MONEY.
It seems backwards that starting at a lower price will make you more money in the end, but all the studies show that homes that are over-priced sit on the market much longer and in the end sell for less than comparable homes that were priced in line with the market.
If a home doesn’t sell within 30- 60 days, it’s a good indication that there is a problem…and unfortunately, the problem usually is that the house is priced too high.
Call or email PITTSBURGH STAGED HOMES to find out how staging can add to the value of your home.
SOME ADDITIONAL INFORMATION ABOUT PRICING YOUR HOME: