A lot of people price their home high – much higher than the appraised value. They think, “I’ll start out high and if no one seems interested, I’ll lower the price.”
Home buyers are aware that sellers use this tactic, and they’re prepared to wait until the price comes down. That means YOU have to leave your home on the market longer than it should be, and you’ll probably get fewer showings.
The longer your home stays on the market, the lower price you’ll be able to ask for it. Why? Because when you keep your home on the market month after month and keep lowering the price, potential buyers will assume there’s something wrong with your home. Either that, or they’ll wait to see just how low you’ll go.
On the other hand, pricing your home below market value may result in multiple offers, which will drive the price UP.
Putting a price tag on your home is part science, part guesswork. But here are some things you should discuss with your real estate broker when deciding on the optimal price for your home.
Comparable listings and sales
You’ll want to do what is officially called a Comparative Market Analysis (CMA). In layman’s terms, that means you’ll do a side-by-side comparison of similar homes (within ½ mile radius of yours, if possible) that were listed recently or are currently listed.
- Square footage (within 10 percent of the net square footage of your home)
- Lot size
- Number of bedrooms
- Number of baths
- Room sizes
- Overall condition
- Upgrades, additions, remodels
Keep in mind that, even when homes are similar in size and age, if one home overlooks I-5 and another is on a spacious rural lot, the price will likely vary considerably.
If possible, tour similar homes that are currently listed and take note of the things you think make the home sellable (or not sellable).
Then ask yourself, “Why would a buyer prefer my home over this one?”
If a buyer wouldn’t buy your home over the competition, give serious thought to lowering the price on yours.
Comparable sold homes
Look at the original list price of recently sold homes similar to yours, and compare that to the actual sold price. You’ll be able to see how much the price was reduced while it was on the market.
Comparable unsold homes
Listings that have expired or have been withdrawn can teach you a lot. Do these homes share any commonalities? Why were they taken off the market? What can you do to avoid an expired listing?
Bottom line: Your house is worth what somebody is willing to pay for it.
Price it right, and you’ll increase your chances of selling it. I can help. I’m Joni Kerley and I specialize in helping people sell and buy homes in Snohomish County, WA. Give me a call at 425-343-4545.
Here’s an excellent video from HGTV that gives some tips about the dos and don’ts of pricing your home: