There are many ways to price a home and for many sellers their instinct is to price the home high so they have a “cushion” for negotiation. This can work, with the right buyer, but I caution my sellers against it in most every case because I have found that with pricing a home it’s not really about overpricing or underpricing — it’s all about right-pricing.
When I sit down with my sellers, I determine a price range for their property based on several things — comparable properties, square footage, condition, and a number of other factors, including seller’s desired timeframes and motivation.
When coming up with a price, I have found that the biggest mistake is overpricing. When you overprice a home, the house sits on the market; when that happens, buyers look at the property and wonder why it’s been on the market so long, assume something is wrong with it, and pass on it. This might force a seller to lower the price much lower than they’d like in order to get someone to take a “chance” on a property that doesn’t have anything wrong with it other than being initially listed at too high of a price!
As you can see from this graphic, the percentage of market value a house is listed has quite an impact on the number of buyers who will be exposed to the property. The further above market value a home is listed, the smaller the pool of buyers who will actually see it. The further below market value, the larger the pool of buyers who will be exposed to it.
In my experience, while it is very easy to overprice a house, it is almost impossible to underprice a house. The reason for this is because the market usually determines that there is this wonderful house at an amazing deal and then the market responds with multiple offers and sellers can go with the one that is most attractive to them.
If you are thinking about selling and would like to discuss pricing and marketing strategies for your home, please call Susan Georgeson. Susan is quick to respond to all calls/texts or e-mails and can’t wait to earn your business. She will work tirelessly to help you achieve your real estate goals.
