Get it right with your home pricing strategy, and you reduce the chances of your property staying on the market for too long. You also stand to get a lucrative return on your sale.
Your initial price should be such that it offers value to both you and the buyer. Arriving at this price requires that you research the real estate market, consult with a qualified local agent, and try to get some perspective on the buyer’s mindset.
With these factors in consideration, here are some of the top home pricing strategies that will help you achieve your home selling goals:
1. Set a Below-Market Price
This strategy is the way to go if you are selling your home in a buyer’s market. There are more homes on sale in this market than there are potential buyers, and this imbalance in supply and demand forces gives buyers an edge. Setting a price that’s on the lower side of the spectrum will help you stand out from the crowd and appeal to the masses. You are likely to start a bidding war with more interested buyers, which will see you sell at a price higher than the listing price.
Undercutting your price is also an excellent home pricing strategy if yours is an older property. It is only expected that your asking price is on the lower end of the property requires repairs and upgrades. The lower price will attract buyers who are not as picky and ready to take care of any works that may be required.
2. Base Your Price on an Analysis of Comparable Sales
Comparable sales, commonly referred to as “comps,” are invaluable tools that appraisers and real estate agents use to price properties. Using a comparative market analysis (CMA), the real estate agents compare your home to recently sold properties that are very similar to yours in terms of location, size, and condition.
This objective home pricing strategy will help you appreciate the competition out there and narrow down a price range for you. Price at the market below, or close to it. Based on your home’s unique features and any installed upgrades, you can price your home at a little below or over the price range in the market.
3. Use Strategic Price Points
Ask homebuyers what they are looking for, and they will list the desirable features, adding that they’d like a home within a specific price range. Talk to enough buyers, and you will realize that they will consider properties between price ranges separated by increments of ten, twenty, or twenty-five thousand dollars.
In this case, a home listed at $ 4000 will attract as many potential buyers as another one listed at $ 4500. If you list your home at $ 4580, you may lose out on potential buyers who are ready to close the sale. This is tied to another home pricing strategy about keeping the numbers simple.
Today’s homebuyers do most of their property search online. The strategic price point home pricing strategy applies well in these online searches. Set your listing price according to these strategic price points, and you can be sure that your home will appear on buyers’ searches.
4. Price According to Market Shifts
You can sell your home for more if you sell at an opportune time. Every real estate market experiences some fluctuations based on the seasons and buyer behavior.
The difference in how much you can get for your home between the peaks and troughs can add up to 20% — and even more.
Residential property demand, and by extension, the prices tend to be high during later summer and early fall. During this time, buyers rush to settle into their new homes before the school calendar resumes.
This is information that you can use to price your home properly. Know your market’s peak season, and you can get away with quoting a higher listing price since buyers will willingly buy at that price during the peak season.
5. Set an above-market Price, and be Open to Negotiate
There is always a danger of your property not selling fast enough, or at all, if you list your home at a price higher than the market price. That’s not to say that you will not sell the property since it takes just one buyer after all.
If you are not just being overly ambitious and believe that your property is worth as much, go ahead and let your asking price reflect the same. The better if you go in ready to negotiate with buyers who show serious interest.
Home pricing is as a science as it is an art. The outlined strategies have been tested and proven for different properties and markets.
About Transition Realty
Transition Realty owner Steve Lehmeyer specializes in helping people manage real estate transactions in the Minneapolis/St. Paul area. His experience in the Minnesota real estate market spans 20 years. Steve and his team work with clients to buy & sell single-family homes, townhouses, condos, lake homes, and investment property. Download a free home search app for your smartphone or search the MLS at TransitionRealty.com.