Why Correctly Pricing Your Home is Key
Everyone wants to sell a home quickly and at the highest price possible. But let’s face the facts: homes that stay on the market longer tend to sell at lower prices. The trick is correctly pricing your home, and prevent overpricing your listing.
With the scarcity of homes on the market, many homeowners are making the mistake of overpricing their homes. Although many homeowners believe overpricing leaves room for negotiation, buyers are impatient and shy away from the idea of several rounds of negotiation. In addition, overpriced homes lower the possibility of multiple offer situations and bidding wars. On average, after two months on the market, homes sell for 5% less than the original listing price.
Let’s say you have a home listed at $629,000. Your real estate agent, in conjunction with your appraisal, suggests to list the home at $619,000, but you stick with $629,000. Your home stays on the market and sells three months later for 5% less. While 5% doesn’t sound like a lot, the difference is larger than you might think, leaving you at $597,550. Had you listed at the suggested price, you may have sold at a higher price in less time. You’ve just spent valuable time and energy without seeing your return.
So, when trying to decide if your home is overpriced, keep these questions in mind:
- Have we had multiple showings?
- Have we gotten any offers?
- How long have we been on the market?
Pricing a Home
Pricing your home should be strategic and at market value. Homes on the market are like cars out of the dealership. For each day a car is off the lot, the value depreciates. Likewise, the longer a home sits on the market, the more value it loses. Your home is listed too high if no offers are made within 30 days.
The prime time for selling a home is the first week of the home being listed. Because the home has been listed for such a short time, buyers don’t know what competition they are going up against. Strategically pricing your home at market value forces buyers and their agents to act quickly. Normally, offers received in the first week are the highest offers a homeowner will receive.
A home that is listed for a long time will cause buyers to question what is preventing the home from selling. Don’t let that be your situation. Don’t let pride prevent you from listing your home at a reasonable price that meets market value. Chances are, overpricing won’t work in your favor.
Work with your team to find the correct price for your home and make it a win-win situation. With a higher demand than the supply of houses, now is an incredible time to sell your home! Research comparable homes in your neighborhood and be realistic. Listen to your real estate agent, respond to the market, and work with the suggestions you receive. You will sell your home in no time!
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