8 Proven Strategies For Serious Sellers To Price Their Home Right Today
As real estate professionals, we know the single most important factor in selling your home today is price. With so many homes on the market now, setting the “right price” is critical.
During the past housing boom, some homeowners priced their properties aggressively – well above market value. That was yesterday. Today, overpricing simply turns away buyers who could otherwise afford your home. After all, why look at home outside your budget? Overpricing also sells the competition first to buyers who know there are better deals on the market. Still, you don’t want to price your home so low as to give your equity away.
If you home is priced just right, buyers – armed with online research and property listings – will know your home is worth what you’re asking. Ultimately it is the market – not the seller – that determines today’s right price.
So, how do you set a realistic, right price? Here are 8 inside tips serious sellers can use to price right in today’s market:
- Recent Sales
In this shifting market, using sales within the last 3 months, sometimes 6 months, is important. “Old” records do not reflect today’s market. The best comparison is to look at sales prices of actual closed sales – factoring in the value of any seller-provided incentives and subsidies.
- True Comparables
As real estate professionals, we compare your property with similar, nearby properties. We call these comparables, or “comps.” Using true comparables is key to setting the right price. Specifically, we’ll compare “apples to apples,” looking at homes that are alike in terms of location, total rooms, bedrooms, baths, square footage, style, condition, age, lot size, and other factors.
- Expireds
We’ll also check prices of expireds (properties whose listing contract ran out without a sale) and “withdrawn from market” comparable properties. These properties typically were overpriced, and the market is indicating the listing price was higher than buyers are willing to pay. Expireds provide an excellent ceiling indicator of what price is too high.
- Pending Sales
When price information is available, we may use pending sales (contracted but not yet settled or closed), because these properties offer a trend indicator to what prices active sellers and buyers are agreeing to right now. Serious sellers realize some pending sales fall through, and thus do not become true comparables.
- Active Listings
Only closed sales truly reflect what buyers in today’s market will pay. What other sellers are asking has little relation to the value of a serious seller’s property. Using other listings as a guide, however, is a smart way to position your property to beat the competition to the right price, in the right condition and with the right terms.
- Appraisal
Another approach is to invest in a paid professional appraisal of value. Although a seller-paid appraisal is often unnecessary, it can be an effective strategy in a situation where the seller wants to list “under appraisal” to position a property as distinct from the competition in the area, especially where many similar properties are already for sale.
- Online Valuation
Home valuation websites that provide instant price estimates tend to be the least reliable guide to the right price. Often these nationwide services have outdated data or use one-size-fits-all formulas that may or may not apply to your specific property. At best these valuations give a ballpark estimate. As neighbourhood specialists we are in the best position to know what your property is really worth in today’s local real estate market.
- New Price
Serious sellers know that if a home has been on the market for 2 to 4 weeks with little to no traffic, the property is overpriced. Also, if there has been traffic but no offers, the price is probably too high, and a price reduction should be considered.
When a home’s listing price is more than 5% over comparable homes, price alone discourages buyers. Remember, buyers today are comparison shoppers who know there are some deeply discounted bargains on the market – from expired listings, pre-foreclosures and short sales, to builder close-outs, relocating families and investor sell-offs. (We’ll be happy to find them for you.)
