By Jenna Ryan, Realtor
REMAX Dallas Suburbs
Pricing your home is one of the most important steps to getting the most money possible from the sale. An overpriced home will not sell, no matter how good the market is. At the same time, you don’t want to price your home too low–there’s no sense in throwing money away.
1. Price Your Home to Sell
It’s generally thought that you should price your home higher than you’re really wanting to get from the buyer. While this tactic works in nearly every other sale/purchase scenario, it doesn’t work this way in housing, especially in the current DFW marketplace.
People are accustomed to paying list price for homes, especially those under $500,000, and will often shy away from making an offer on a home that is priced too high, for fear they’ll be rejected. It is highly advised that you price your home at the amount you’re wanting to get, and not higher.
2. Price Your Home to Sell Quickly
It’s best to price your home to sell quickly–in the current market, especially for homes under $300,000, your home should sell in a week to 30 days. Any longer than this on the market, buyers will start getting suspicious that there is something wrong with your property and pass it up.
Some agents won’t even show homes that are on the market over 30-45 days. Don’t leave your home out there with a high price tag. Statistics show that homes that sell faster net more than those that are on the market for a long time.
3. Price Your Home in Line with Comparable Sales
You want to price your home to line up with comparable sales, NOT current listed properties in your neighborhood. Why? Because homes that are for sale right now are not yet sold–and are an unreliable source of data for area home sales.
You also want to make sure that the comparable properties you are considering are actually comparable to your home from an appraisal standpoint. This means that the homes are within no more than 200 sq. ft. difference from your home (higher or lower), and that there are similar features such as number of bedrooms, bathrooms and garage spaces. You also want to find homes that have similar features such as large lot, upgrades and swimming pools.
4. Don’t Use Zillow As for Comparables
Zillow is a very useful website, however, it generates it’s pricing analysis automatically and is therefore not often accurate. Zillow can’t take into account the nuances in the marketplace the way that a CMA (Comparable Market Analysis) from a professional real estate agent can. In fact, I have found in my real estate practice that Zillow often gives lower estimated price points than the market will bare.
5. Keep the Appraisal in Mind
Many people price their homes high without considering the appraisal. If there are no comparable sales of homes in your area that are priced as high as you want for your home, then you will have difficulties with the appraisal. People will rarely pay more than appraised value for a home, unless there are extraordinary circumstances. This is why it’s so important to have a professional REALTOR help you to price your home accurately, to prevent problems with the appraisal. You want to go to the closing table, not renegotiate the contract once the appraisal comes back low.
6. Be Realistic About the Condition of Your Home
You want to be realistic about the condition of your home. If your home is not updated, and you’re selling in an area where comparable homes have updates (ie: granite, wood floors, new appliances), then you have difficulty getting top dollar. That’s okay. It is often easier to price your home according to its current condition than it is to go do a bunch of updates. That is, price the home at the point to where the buyer can afford to get the updates and not be upside down upon purchase. In some cases, new appliances, paint and light fixtures may be worth your investment to do before you sell. This is something your Realtor can help you determine.
7. Be Prepared to Lower the Price, Just in Case
When you put your home on the market, the goal is to get the best price possible. Sometimes market conditions are difficult to determine, and your home ends up not selling for the listed price. When your home is getting a ton of showings, but no offers, this is a huge flashing red sign saying, (((The Price is too High))). If your home is not getting any showings at all and the market is hot, hot, hot… this is another flashing red sign saying, (((The Price is too High))). Sometimes adjusting the price by just $5,000 can bring the offers you’re expecting. An overpriced home will not sell, no matter how good the market is.
8. Adjust the Price of Your Home By Features
Certain features will greatly increase the value of your home. A home with a nice pool that has been well maintained can fetch up to $10-20,000 more depending on the area and price point of your home.
9. Price According to Pockets.
This is a great tip that Realtors live by… that is to price your home according to “pockets”. Think about it. When an agent or home buyer does a search for a property, they generally have a price point in mind.
For example: people are generally qualified for homes up to $150,000 or $250,000, $350,000, $450,000 and higher. You want to position your home as the “HERO” of the market so you can beat out the competition.
If you price your home at $355,000, then many people who are looking for homes up-to $350,000 will not see your home at all. Plus, your home will be competing with all the homes in the $350-$400,000 market which means yours may look puny compared to more expensive homes in that bracket. Try to stay under the greatest pocket you can.
10. Consider the Psychological Value of 9
There is a reason we go to the store and see things for $9.99. Why? It works! Even though an item priced at $9.99 is relatively the same as $10.00, $9.99 just sounds cheaper–right? Same goes for your home. Don’t price it for $450,000–it’s better to price it at $449,900. This is only $100 difference and sounds much more appealing to buyers. It can help you get an edge over a comparable home for sale that’s not aware of the psychological power of using 9 in the price point.
There you have it! 10 Tips for Pricing Your Home. There are many other factors that need to be considered when pricing your home, as there are many varied home types, areas, subdivisions and stigmas. The very best way to price your home is to get a Certified Market Analysis from a professional Realtor. I am personally available to assist you. Contact me any time to set up your Free Consultation. 972-510-9177. I am happy to help you to price your home, whether you choose to list with me or not. Talk to ya soon!