Helping you NET the home of your dreams.

Priced to Sell: A Game Plan for Setting Your Listing Price

Setting a home’s list price is easier said than done. A good real estate agent will recommend a price range, but never assign an exact price — that’s ultimately for the seller to decide.

Although sellers aren’t required to price according to inventory levels or the market condition, it’s smart to discuss these matters with your agent early and often to make an informed decision. Here are some considerations to keep in mind when choosing your listing price.

 

Discuss price reductions before listing

If you aren’t highly motivated to unload your home, time is on your side. Absent recent or obvious comparable sales, the market value of your home could fall within a broader range. If you want to give it a shot at the top of the range, go for it. Then monitor buyer traffic to see how the market responds.

If you try the higher end of your home’s price range, agree with your agent early on that you will drop the price after a set amount of time. You can then use that price reduction as a marketing tool to get more people in the door. At least you will know that the higher price strategy did not work.

Pricing low doesn’t guarantee multiple offers

When homeowners hear about other sellers who received multiple offers or sold their homes for over the asking price, they assume it can happen to them, too. But just because your neighbor received three offers within two weeks does not mean you will.

The homes that receive multiple offers are sometimes purposely priced low to get that activity. These home are generally in a good location and in their best showing condition. And for all you know, the seller of the low-priced home with multiple offers was in a rush to sell and left money on the table.

If you price your home low, be prepared to take that price. While it’s not unheard of, raising your list price several weeks into the listing will surely turn off potential buyers.

Many agents look for a quick sale

Well-intentioned agents don’t want to watch your home sit on the market. They understand that homes that go weeks or months with few showings will ultimately sell for less than if they had been priced correctly right out of the gate.

Sometimes it becomes a battle — one you need to avoid. If your agent pushes for a lower number but still agrees to take the listing at your higher price, you may want to reconsider working with that agent. He or she represents your interests in the marketplace, both to other agents and the buyers they encounter. An agent who doesn’t get their way on pricing may end up sabotaging your sale. A good agent will agree to support your higher price strategy, but have a price discussion after some time on the market.

Determining the real market value

The true market value of a home is what an able and willing buyer and seller agree to in an arms-length transaction. But you won’t know that until the end of the process.

If the home sells within a few days of listing, chances are you listed too low. If months go by without any action, you hit the high mark. A home that is priced right will get some steady action. If you receive second or third showings from multiple buyers over the course of a few weeks, you’ve likely hit the mark with pricing.

Once you have an accepted offer or a signed contract, prepare for more negotiations after inspection. If buyers feel they are paying a lot, they will come back and ask for credits or fixes. A true sign of a well-priced home is one where the seller and buyer negotiate up until the eleventh hour.

If you plan to sell your home, talk about pricing with your agent early on, and continue the discussion as you get closer to listing. Check out listings online, go to open houses, and vet the competition weeks before listing.

If you and your agent are on the same page about the pricing and marketing strategy, your home’s ultimate price shouldn’t come as a surprise.

 

http://www.zillow.com/blog/setting-your-listing-price-170573/

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