Competitively pricing your home is the key to getting it sold. In a changing market like this one– and especially one that’s on the downturn– overpricing can increase your chances of being caught in a financially tough situation.
How exactly do you price your home accurately? First of all, you don’t do it yourself. Yes, it is possible to sell your home on your own, but you are exposing yourself to inadequate representation (no offense). Stay away from websites like Zillow that give you an estimate of what your home is worth. Websites only take into consideration the number of bedrooms and square footage and not the intricate details of the home or what the surrounding area is really like. In place of a robot, consult with a real estate agent who is an expert on your local market. They have additional tools to assess housing activity. Want to list your home at a higher price than its currently worth? Your real estate professional can also make suggestions on home improvements that will increase the value.
You’ll also want to look at the comparables in all stages of the home selling process. Start by looking at the homes that were sold in the last 6 months– these are the same numbers appraisers use to assess a home’s value. Unfortunately, in the fast-changing market currently in place, looking at sold prices 6 months ago will not give you the full picture. You can also analyze the homes that are pending (in process of being sold) and the active homes (ones currently listed but not under contract). Pending homes typically close within 30-45 days after they go under contract which can give you a good idea of what price ranges people are currently buying into. Some appraisers also look at the pending homes during their assessments when experiencing a highly active housing market. The homes actively listed will be your competition and we have a few tips to help you compare. First, take a look at the active homes in your area and how long they have been on the market. This will paint a clearer picture on strategically pricing your home– if the market is going down and you price it lower than your competition, you could actually beat them at getting it sold. Also pay attention to the frequency of price reductions in your area while analyzing the numbers. Don’t forget a real estate professional has additional tools not accessible to consumers! Our final tip is to schedule showings with your listing agent to view these active homes. Though you aren’t a buyer, it’s a great way to see other homes through a buying perspective and compare what your home has that can make it better or worse in comparison.
Now that we’ve given you the tools to succeed, let’s talk about what happens when you don’t use them to list at a sensible price. Overall, the main issue is that your home is sitting on the market which causes financial strain. If you already moved into a new residence, you’re now not only making the monthly payment (plus utilities and taxes) in your new home, you’re also doing it in your previous home doubling your housing payment indefinitely. Having your home sit on the market for a longer period of time could cause buyers to wonder if something is wrong with it even though the only thing wrong with it is the price. Your home at too high of a price could automatically make it someone’s second choice and you actually save money to price it lower in this case. Pricing competitively means buyers are more motivated to submit an offer in fear of losing it to someone else. If there is a cost to hold it, instead of maintaining unnecessary payments trying to get more money, take the price down and sell it for lower, eliminating your unnecessary expenses. Don’t forget, we are moving into a slower market and you could potentially miss the remainder of a hot sellers market by pricing inaccurately. Reach out to our team using the form below for a listing consultation.