Pricing your home in any market is an art and should be done strategically with an understanding of possible outcomes. With the rising rates and inventory normalizing, it becomes even more important to price your home appropriately for the market to net the biggest return.
Let’s start by talking generally about how pricing works. You can price your home anywhere you want to, the market will give you feedback and this will affect the outcome of your sale. More specifically, it will impact your net proceeds.
Selling a home quickly isn’t just about getting to the next step as quickly as possible, it’s about impacting the markets perceived value of your home. A fresh home on the market priced at $300,000 has a much higher perceived value than the same home with the same price that’s been on the market for 30 days.
It comes down to simple supply and demand rules. The unique thing about homes is there is never going to be two that are exactly the same. There is variation in floor plans, finishes, and colors, but if all else fails no two homes can be on the exact same lot. This means that when a qualified potential buyer walks into a home that is the perfect fit for them, there is some fear of missing out.
In this magical moment they have to make a few of decisions.
1. Will they write an offer?
2. When will they write it?
3. What will the price and terms of their offer be?
If a home has been on the market for a while, urgency automatically decreases and with decreased urgency comes less anticipation if someone else also submitting an offer, which also means that they are likely to offer less. The newness and excitement wears off over time and they become more critical of the homes imperfections.
Don’t get me wrong, there are strategies and negotiation skills that can help impact the outcome, however, even these skills are much more effective when paired with the appropriate pricing strategy.
Homes do not sell at a specific value. They sell in a range of values and the marketing and negotiating skills of your Realtor will determine where in that range of values the home will sell. A home priced appropriately will create quick interest, driving the price up.
The biggest mistake that sellers make is to try to push price in a changing market. This will cause them to be chasing the market to find the right price and therefore sell for less. Ask your realtor what the best strategy is to make sure that you are not pushing price and chasing the market, so that you can sell for the highest possible price.
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