Why Do You Need an Expert Agent to Price Your Home Accurately?
Overpricing is often seen as the main reason why certain homes last longer on the market compared to others. It’s a tricky situation to be in because you don’t want to undersell your home, but at the same time, you don’t want to price yourself out of the market.
The key is to find a happy medium, and this is where a real estate agent with expert market knowledge at the local level comes in. With their help, you can be sure to price your home just right, so it sells quickly and for the best possible price.
Why Do Buyers Ignore Overpriced Listings?
In today’s online landscape, listings include key data points that help buyers gain a solid understanding of the fair market value in their desired locations.
These data include median listing prices, number of days on the market, a sales history of the home, a mortgage calculator, and so on.
With all of this information readily available, buyers are empowered to do their due diligence and figure out a home’s fair market value before even stepping foot inside.
If they see that a home’s overpriced compared to others in the area, they’re likely to write it off completely and move on to another listing that’s more in line with their budget and meets market expectations.
Essentially, overpricing your home is one of the quickest ways to turn off potential buyers and significantly lengthen its time on the market.
The Dreaded Red Flag
Some sellers will list their homes at an inflated price in hopes of negotiating down to a more realistic figure. This might work in some cases, but listing at a higher price could exclude a pool of buyers who are only interested in listings that are priced fairly from the get-go.
Once these sellers realize that they’re not getting any bites at their current asking price, they then have to lower it, which can raise a red flag for buyers who might wonder what’s wrong with the property. Some house hunters will even filter listings that have been on the market for longer periods, so they’re likely to miss your listing entirely.
It’s important to note that if you do eventually lower your asking price, buyers will likely offer even less than what you’ve reduced it to. In their minds, they’ll feel like they’re getting a deal on a home that’s been sitting on the market for a while, so they’ll lowball you accordingly.
This is why it’s always best to price your home as accurately as possible from the start.
What’s the Best Way to Price Your Home?
Now that we’ve established why overpricing is a bad idea, let’s take a look at how you can price your home to ensure a quick and profitable sale.
The best way to price your home is to start with a competitive yet realistic asking price. This means taking a close look at recent sales data to determine the final selling price of comparables in your area and using that information to come up with a fair listing price for your home.
Known as a comparative market analysis (CMA), this process is fairly simple to do on your own if you have access to recent sales data. However, if you want the most accurate and up-to-date information, your best bet is to work with a professional real estate agent to run a CMA for you.
Top agents will have access to detailed MLS data, not to mention valuable market knowledge at the local level. This, in turn, can help you price your home just right and sell quickly for top dollar.
How To Price Your Home in a Buyers’ vs. Sellers’ Market
Once you have a starting price in mind, it’s important to adjust that number based on the current market conditions.
In a buyers’ market, there are more homes for sale than buyers are looking to purchase, giving buyers more negotiating power when it comes to price. But this doesn’t mean you need to list your home at a rock-bottom price just to attract buyers.
Instead, start with a strong yet fair asking price and be prepared to negotiate down from there. For example, if your home is worth $300,000 and this is the sale price you’re aiming for, you might want to list it at $325,000. That way, you have some room to negotiate and you’re still likely to get your desired price in the end.
In a sellers’ market, on the other hand, more buyers are looking to purchase homes than there are homes for sale. This gives sellers more negotiating power and puts them in a position to command a higher price.
If you find yourself in a seller’s market, start with your desired asking price and be prepared to negotiate up from there. Another strategy is to list below the fair market price, which will generate a lot of interest and likely lead to multiple offers.
You can then let the market dictate how high the final selling price will go. If your home is caught in a bidding war, your real estate agent can help you navigate the offers and counteroffers to ensure you and your home come out on top.
How To Price Your Home Just Right — Recapped
Pricing your home just right is essential to selling it quickly and for the best possible price. Here’s a quick recap of what you need to do:
- Work with a real estate agent who can pull a detailed CMA to give you an accurate picture of market conditions at the local level.
- Avoid aggressively overpricing your home, especially in a buyers’ market, as this will turn off potential buyers and lengthen your home’s selling timeline.
- In a buyers’ market, start with a strong yet fair listing price and be prepared to negotiate down to your desired selling price
- In a sellers’ market, start with your desired asking price or price lower than the fair market value and be prepared to negotiate up.
By following these simple tips, you’ll be on your way to selling your home in no time.
Reach out to an Elegran advisor today for more information.