Effective Home Pricing Strategies for Sellers
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by Richard Morrison
- January 1, 2020
- Selling
- 0
Selling a home can be an exciting yet stressful time. One of the most important decisions you’ll make when listing your house is setting the right asking price. The listing price you choose can make or break your ability to sell quickly and for top dollar. Read on for key strategies smart sellers use to price their homes in today’s market.
Read more:
- How to Price Your Home: Top 10 Tips To Sell
- How Long Does it Take to Sell a House? Factors that Affect
- How to Negotiate a House Price When Buying
- Essential Items To Do When Making Plans To Sell Your Home
- Asking Price vs Selling Price: Ways to Calculate the Selling
- Top Tips for Negotiating a Home Sale For the Seller
Conduct Thorough Market Research To Know Pricing Strategies
Before settling on an asking price, you need to understand the current state of the housing market in your local area. Look at comparable homes that have recently sold in your neighborhood to get a sense of fair market value. Study the listing and sale prices, days on market, and property details like square footage and upgrades. This market intel will give you an objective view of what buyers are paying for homes like yours.
You can start your research by getting a free home valuation online, but make sure to connect with a local real estate agent as well. Seasoned agents have specialized access to MLS data and direct insights into buyer demand. An expert agent can refine your home’s value with an in-depth comparative market analysis.
Set Your Price At Market Value in a Balanced Real Estate Market
If housing inventory and buyer demand in your area are evenly matched, consider pricing your home right at market value. This balanced market strategy gets your home in front of the most buyers. According to CREA data, buyers still purchased homes for an average of 100% of the list price in 2022.
By aligning with comparable sales, listing at market value lets you capitalize on high buyer traffic early on. You tap into pent-up demand before competing new listings hit the market. As a result, your home has a better chance of securing a full-price offer.
Slightly Price Below Market Value in a Hot Seller’s Market
When supply is low and competition is high among buyers, you may be able to attract even more interest by dipping just below market value. According to the pricing pyramid model, a price 5-10% under market opens your home to 75-90% of potential buyers, compared to 60% at market value.
This strategy turns up the heat, fueling a bidding war scenario. In today’s market, list prices are still often considered negotiable entry points. Savvy buyers expect to pay over the asking price if demand is high.
The risk is that you price too far below actual value. Leave enough room for bids to escalate without exceeding what the market supports. Work closely with your agent to find that sweet spot.
Price Your Home A Bit Lower in a Cooling Market
As markets shift toward more balanced conditions, buyers regain leverage. In a cooling market, the fastest sale often results from an under-market price. List at least 5-10% below comparable sales. This helps you stay ahead of further declines as prices soften.
The downside is you might sell for less than if you had priced well from the start. But in cooling markets, the longer a listing sits, the more it tends to sell below value. Move quickly, even if it means compromising a bit on price. Did you know that according to a survey by Richard Morrison, 87% of sellers were satisfied with pricing at 3% under market value compared to 62% who listed right at or over market value? Underpricing just slightly can really get buyers engaged.
Use Charm Real Estate Pricing Just Under Round Numbers
Online buyers filter searches based on price increments like $200,000 to $250,000. To maximize visibility within popular ranges, charm price just below round cutoff points. For example, list at $249,000 instead of $250,000 to appeal to more buyers searching up to $250,000.
Boost Curb Appeal With an Investor-Friendly List Price
Some buyers have the ability to submit all-cash offers and waive appraisals and inspections. List just below thresholds like $500,000 or $1 million that attract investors. They recognize the opportunity to negotiate a discount on an asset priced just under an amount with psychological appeal.
Highlight Unique Details to Justify Above-Market Pricing
It’s generally risky to overprice in any market, but you may be able to go up to 10% over market if your home has rare attributes worthy of a premium. Highlight details like luxury finishes, multi-generational living capabilities, or Rare attributes that make your home stand out also help counter any stigma of listings that sit longer due to high prices.
Time Listing Strategy Based on Seasons
Look at seasonal trends to time your listing for periods of peak buyer activity. In competitive spring markets, you may be able to be more aggressive with above-market pricing. In lower traffic winter months, you might improve visibility with under market value pricing.
Key Takeaway
Smart home pricing strategies combine art and science. You need objective market data, but also creativity in positioning your listing to attract the highest demand possible. Confer with your agent to land on the optimal asking price and be ready to tweak if needed to stay competitive. The right listing price aligns with market value indicators while accounting for seasonal factors and unique property attributes.
FAQs
Q: What strategies should home sellers use to determine the list price for their house?
A: Home sellers should consider a variety of factors when determining the list price for their property. Factors such as current market conditions, value of your home compared to similar homes currently on the market, and effective home pricing strategies can help you set a competitive and attractive price for your property. A real estate agent or professional appraiser can also provide valuable insight into what the right price is for your home.
Q: How do I know if I am pricing my home at market value?
A: It’s important to understand current market conditions, including the number of buyers in the area and the types of offers they are making on homes. You should also research recent sales of comparable homes in your area to get an idea of the current market value for your property. With this information in hand, you can then adjust your asking price accordingly.
Q: Are there any risks when I price low or price high?
A: Yes, there are risks associated with both pricing your home too low or too high. If you set your price too low, you may not get full value for your property and could potentially leave money on the table. On the other hand, if you set your price too high, it could cause prospective buyers to look elsewhere and may result in a longer time on the market.
Q: Is there any benefit to pricing my house below market value?
A: Pricing your house below market value can be beneficial if done strategically. Doing so may attract more potential buyers who may be willing to pay more than what you initially asked due to competition from other buyers. This could lead to multiple offers which would result in higher sale prices than if you had priced it at market value.
Q: Is there an optimal time frame for selling my house?
A: The optimal time frame for selling a house depends largely on local real estate markets but generally speaking, spring/summer tend to be busier months with more active buyer traffic while winter/fall tend to be slower months with fewer buyers actively searching for properties. Additionally, some studies have shown that listing a property during holidays like Thanksgiving or Christmas might help attract out-of-town buyers who are visiting family over break.
Conclusion
When it comes to selling your home, the right pricing strategy is important. It will determine how quickly you can sell and for what price. Generally, there is a balance between setting a higher price and having your home sit on the market for too long or setting a lower price that may leave you with less money in your pocket.
A good real estate pricing strategy could be to set your starting price below market value to attract buyers, as this gives them the incentive they need to make an offer. This also allows you to gain more leverage during negotiations if multiple buyers are interested in your property at the same time. Once you have determined the best pricing strategy for your home sale, stick with it and be patient – it may take some time to find the right buyer and get the best value for your home.
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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