Why Pricing Your Home Right Is More Important Than Ever!
The housing market is shifting and if you are considering putting your home on the market, pricing your home right has never been more crucial.
We’ve all heard the big news lately about interest rates going up and a slowdown happening in the real estate market. After the 2008 housing crisis, it seems as everyone tends to go on a frantic at the mention of a housing market shift. The housing market has been consistently on the rise for the last decade, so it makes sense a correction would eventually happen to create a more balanced market.
According to Lawrence Yun, chief economist of the National Association of Realtors: “I would characterize the current state as normalizing and not truly a buyer’s market. It was clearly a seller’s market in the spring of 2018, but now things appear to be more balanced.”
For those who are considering putting their home on the market in the near future, pricing properly is going to be the difference between selling your home fast and at value or having your home sit on the market for weeks.
Why? Homes are not selling as quickly as they were just a few months ago, an increase in the housing inventory gives buyers more leverage in the selection and negotiation process.
Price It Right From The Start!
Do your research and be realistic about the value of your home. Realtors often struggle with getting the homeowners to understand and accept the real value of their home because many times emotional attachment and sentiment play a significant role. We also often hear from sellers about a neighborhood house that sold for an x dollar amount so homeowners automatically assume that their home should be worth the same or more. What they lack to understand is that timing can have a massive effect on the value as the market continually fluctuates and just because a home goes on the market at a certain price, it does not mean it sells at that price.
Instead, attempt to detach yourself on an emotional level when evaluating and comparing your home to others. Also, if you are comparing to homes that have sold nearby, make sure the sale was recent within the last 2-4 months and learn what the final sale price was.
Third Party Sites
Be wary of the information you may find on 3rd party sites such as Zillow, Realtor.com, Redfin.com, as they may not be able to provide the full picture when it comes down to compiling homes that are truly comparable to your own. Instead, ask your realtor for comps around your neighborhood and the surrounding area. Your realtor will be able to pull real-time comps that are more accurate to your home’s square footage, layout, number of rooms, and any other special features.
Pricing your home right can be complicated and time-consuming, but doing your research can literally pay off.
Big Numbers Matter!
Say your home is worth $500,000 most sellers want to price their home at $510,000 for some wiggle room. It makes sense, right? Buyers that can afford a $510,000 home can usually go up to 550k or higher. When buyers are searching in their price range from $510-$550k your home will be compared against the more upgraded, larger and higher-end homes. As the buyer’s view homes they are undoubtedly setting expectations based on their price range, and if you are at the bottom of their price range, they will generally move on.
By pricing it right at $500k, your buyer should be in the 450k – 500k range, giving your home a better chance by becoming the standard for their expectations. Finding that pricing sweet spot is vital to keep you from sinking deep in the rabbit hole and chasing the home downward! Price reductions cost more than just the price drop-off. It usually means a lower offer. Price the home correctly and stay firm on the number!
Leverage your home for multiple offers
Pricing the home right is key, but getting the condition as sharp as possible is equally important. The old saying here is “how we live in a home and how we sell a home are two different things.” Do all necessary repairs, perhaps even do some home staging to make sure your home looks it’s best.
Having a home that is in excellent condition and priced correctly is a buyer’s ideal home and sellers best way to leverage the best price possible. The more offers you receive, the more leverage you will have to negotiate.
What’s Your Motivation For Selling Your Home?
We’d all like to think people who are selling their home’s are for positive reasons, such as upgrading to a bigger and better home or relocating. Unfortunately, that is not always the case. Many people sell for various financial reasons or personal life-changing events. Being honest with your realtor about what your reasons are for selling, is important and it will help your agent identify the right price for your home and the right marketing strategy. However, we do advise keeping your selling motives confidential between yourself and your realtor. You want to avoid giving anyone the opportunity to take advantage of your situation. Your agent’s job is to get you the most money possible and sell your home within the timeframe you need, so help them help you!