While there are additional factors that come into play when pricing a home, such as time of year, supply and demand, and market fluctuations, the right price is ultimately the maximum amount that a buyer is willing to pay. It’s important for sellers to keep emotion out of the process, which can be understandably difficult.
CMA to Price a Home
A competitive Market Analysis (CMA) to gather information about similar homes in your area that have recently been on the market will be compiled by your agent. This can provide information such as how long it’s taking homes like yours to sell, how much they’re selling for, and how they compare in amenities and condition. A thorough CMA gives you a solid pricing range that your home will fall within, and you and your realtor can refine it from there.
Scope Out the Competition
A CMA will be useful, as it provides info on properties that are currently listed as well. The CMA provides a lot of useful data on listings that have sold or expired in your area, so you can compare them to yours—especially what their best selling points were. While it’s easy to just list your home for the same price as the one down the street, they likely have several differences. If yours has an additional bathroom or an updated kitchen, for example, you can set your listing price higher. Assessing other homes for sale on even small points allows your realtor to give you an honest appraisal of your home’s comparative strengths and weaknesses.
What Sells Faster—9s or 0s
Psychologically, a lower price seems like a much better deal, even though the actual monetary difference is quite low. That’s why there’s the technique of pricing a home just below a certain threshold, like $399,900 instead of $400,000. The CMA and the comparison of other homes for sale in the area can help determine the best course of action in each specific case. It is worth having this discussion with your realtor and finding out his or her perspective on the best strategy.
Price for Online Search Ranges
Currently, buyers have more resources available to them than ever before, and they will use all of them. If you price a home at the full $400,000 you can double its exposure as it will appear in searches within both a $300,000 – $400,000 and $400,000 – $500,000 price range. Most buyers have a price range they are considering or can afford. A buyer looking at homes in the $280,000 to $300,000 range will likely not see your home if it’s listed at $305,000.
Cut the Price After Listing
Sometimes you’ll realize that you’ve listed too high. Fortunately, it’s not unusual or risky for buyers to see price cuts. The key is to recognize quickly that you’ve overpriced and make an accurate adjustment. Avoid the temptation of making many small pricing tweaks over time. Older listings simply aren’t as attractive to buyers and your goal is to sell quickly. It’s always better to make one big price correction up front.
Take the time to speak with a few realtors to get a sense of how they will approach the sale. One realtor may think the best strategy is to sell the home as-is for a lower price, while others may suggest investing in some upgrades and listing higher. In some cases, the real estate agency will split the cost of the upgrades with you, and you don’t pay for them until the home sells. Your individual goals and circumstances will dictate the route you want to take. Ultimately, going into the sale with the right home price will ease the overall stress of the home-selling process.