Pricing a home to sell can be tricky, but the end goal for most sellers is selling their home for the highest possible price. It's not easy, but pricing a home right is ultimately what results in the best outcome for a seller.
What Happens when You Price Your Home Wrong?
Pricing your home correctly with your agent is crucial. What results when a home is priced wrong is sometimes referred to as the "Goldilocks effect". When you price it too high or too low, you take a risk of discouraging offers from buyers.
When you price your home too high, you then may need a price drop to gather up buyer interest. Price drops are sometimes viewed as a red flag. Buyers may wonder if there is a problem with the home. Price your home too low, buyers may question your home's condition and if there are problems at that bargain-basement price. Price it right and buyers are more likely to see the value in your home and place an offer.
The Sweet Spot: Pricing Your Home Just Right
By pricing at the correct market value you'll increase the chances of getting strong offers for your home. Right out of the gate, you will attract buyers and there may be a bidding war. If that happens, you will end up with an even higher final sale price. Another perk of pricing correctly is that your home should sell quickly in a sellers' market.
Much of your home’s value lies in its location and size, but there are many other factors in pricing.
Pricing Tips
How Your Agent Prices Homes to Sell
Your agent takes several things into consideration when pricing a home:
The current values of homes in your neighborhood.
The current demand for homes in your area.
The condition of your home also affects its current value.
When you work with an agent to sell your home, they will provide a comparative market analysis of recently sold homes in your area and review pricing with you.
Assessing the Value of Renovations
Any renovations and upgrades to your home may add value, but not always. It is doubtful you will receive the full dollar amount that you spent. Remember, the potential buyer will not care how much sweat equity you've put into your home and its improvement. Be sure to talk to you agent about what improvements would be best to improve the sale of your home. It may be necessary repairs, staging or some curb appeal tweaks.
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By pricing at the correct market value, you'll increase the chances of getting strong offers for your home.