Pricing a home to sell can be tough. Sellers want to maximize the equity they are able to pull from their property but the market can be a bit confusing at times, especially when prices are on the rise.
Is there a strategy to pricing? Most definitely. Connect with a real estate agent who knows your neighborhood. If you have a little time on your side, make sure you know what’s selling, what’s sitting and how your home fits into the mix. If single-level homes are flying off the market as fast as they are listed but you own a two-story, then make sure you have realistic expectations regarding your price and how long it will take for your home to sell. It’s also important to analyze what has sold, and not necessarily what’s for sale two blocks away. Again, SALES are the key to pricing a home appropriately. In an appreciating market, I’ve seen Sellers keep a watchful eye on other listings in the vicinity that are on the market for sale and instinctively want to price their house “slightly higher” because they feel that their home is nicer than the Smith’s home just around the corner. Never mind the fact that the Smith’s place has been on the market for three months. You see where I’m headed with this?
Pricing a home just slightly on the high side to test the market is very common. But if this is the path you choose, be prepared with a price reduction strategy. Days on market (DOM) can quickly eat into your equity. Homes that linger on the market can be perceived to have something wrong with them by the general Buyer pool, and that’s a stigma that you don’t ever want when you’re trying to move a property.
In some cases, Sellers’ who try and command a price that’s out-of-line with what the market will bear may end up with a NET that’s less than they would have pulled from the sale if they would have priced that home appropriately from day one. Pricing homes to sell without under-pricing them can be a bit of a tightrope walk. Make sure you AND your agent know the neighborhood, analyze what’s selling, tour other homes in the area during open houses and always remember that the market value of your home is what a Buyer is willing to pay for it.