Today’s market has been described numerous times as one where the buyer demand is outpacing the seller supply. Sounds great, but this type of real estate scenario does come with it’s own set of problems for both agent and client. One of these problems is how to price your home before it hits the market. Pricing your home correctly can seriously affect the overall process of getting your property sold. When you’re getting ready to put your home on the market make sure to sit down and have a serious conversation with your agent about what price to set your home at. Below are a few things to keep in mind.
First thing to remember: There is no later.
A common misconception is that if you price your home too high and it doesn’t sell, you can just lower it and no hurt, not foul. The unfortunate truth is that research shows that homes that have a price reduction tend to sit on the market longer and eventually end of selling for less than comparable homes. This effect might come, at least in part, from the negative taste that a price reduction leaves in potential buyer’s mouths. Often times when buyers see that a home has had a price reduction the thought that runs across their mind is, “something must be wrong with the house.” The final step in why these properties typically go for cheaper than other homes is because when a buyer decides to put in an offer, they generally low-ball the price because they see the sellers as motivated to sell quickly. All of these things can be avoided simply by pricing right, from the start.
Second thing to remember: Don’t build negotiation room into the price.
Often when buyers start out on a new home search, they have a maximum price point in mind and try not to deviate from that set price. When you price your home too high because you want to have room for negotiations, think of all the great potential buyers that you might be missing because your set price is above their limit. Even if you are willing to accept a price that meets their price point, they have no way to know this. Think about it this way, a lot of buyers are searching for homes online. If their desired price range is only up to $400,000 and you put your home at $425,000 for negotiation room, those buyers won’t even see your listing.
A better strategy for getting a good price on your home is to price it correctly from the start which will bring in multiple offers. This then forces the price up as those potential buyers begin a bidding war. This sounds like a much better scenario to me, what about you?
Last thing to remember: The Price is Right!
Make sure that your real estate agent prices your home perfectly. This process comes from doing the work to gather all the necessary data and understanding the real estate dynamics in your area. Once they have come forth with a number, make sure to ask for a detailed explanation as to how they priced your property. An agent you who tells you what you NEED to know rather than what you WANT to know puts you and your home in the best possible position.