When you go to sell your home, there’s no doubt that you’ll want to sell it for the highest price possible. In this market, you have probably heard stories about homes selling far above the asking price and the owners making a pretty penny from the sale. According to data from the National Association of Realtors (NAR), 48% of buyers offered above list price, typically at $10,000.
With this information, you may be tempted to assume that the sky is the limit in terms of list price. However, even in this market, working with an agent to set the right list price is critical. Let’s take a closer look at how the wrong pricing strategy could negatively impact your sale and how a real estate expert can help you ensure that you get the most for your home.
Why It’s Important to Price Your Home Right in this Market
The price of your home sends a message to your potential buyers. In this market, the worst thing that you can do is price your home too high and run the risk of deterring buyers. The current market is set to your advantage. Buyers are willing to pay above and beyond what your home is listed for if they fall in love with your home. Additionally, there will likely be competition amongst those looking to submit an offer. NAR reports that, on average, there are 4.8 offers for every home sold. The result of this competition is that your home will likely sell for over the list price. However, that all changes if your home is overpriced. If your home is priced too high, you won’t get that demand and are less likely to have multiple competitive offers. You may even find yourself in a position to have to do a price drop to try to re-ignite interest in your home if it sits for a while. The downside to this is that a price drop can signal a red flag for some buyers.
While it’s tempting to want to price your home high, or set an aspirational price as we like to say here at Chinatti, it’s a risky move. Instead, we like to encourage our sellers to stay close to or below market value. Pricing your home fairly based on market conditions and similar sales in the area will attract more buyers to your home. This type of pricing also encourages a bidding war, which means that you’ll likely end up with a higher final sales price than what you have listed.
One strategy that we often suggest, especially with the given market conditions, is called event pricing. For this strategy, we recommend pricing slightly below market value. Not so much that buyers will start to wonder if there is something wrong with the property, but low enough that it sticks out from other similar properties and drives a large amount of traffic to your home. We find that in this situation, sellers receive multiple competitive offers that end up well above the asking price - even higher than market value and closer to that aspirational price.
At the end of the day, the current market conditions provide a unique circumstance for anyone looking to sell. The competition will drive your final sales price up to an appealing price point that is going to result in you walking away with a good amount of equity. The biggest risk you face is pricing your home too high and scaring off all of those competitive buyers.
How a Professional Can Help
The best way to come up with the right list price for your home is to have a conversation with an expert real estate agent in your area. They’ll take a look at your property and discuss what they view as a fair, compelling price for your home. Some factors that they’ll look at include:
- The value of homes in your neighborhood
- The current demand for houses in today’s market
- The condition of your home and how it affects the value
They’ll discuss these items with you and together, you’ll decide on a price that is sure to bring in a large amount of traffic while also giving you the greatest return on your investment.
Even though it is a seller’s market, pricing your home is still incredibly important to your overall success with your home sale. By working with a trusted real estate agent, you’ll be able to ensure that you’re pricing right to not only get the most amount of qualified buyers to look at your property but also receive competitive offers that will allow you to make the most of the home sale and walk away with the greatest return on your investment. Curious about what your home is worth? Give us a call today and we’d be happy to provide you with the answer!