As spring descends into our snow-ladden city, more and more homeowners are contemplating continuing with their home sales - listing them as soon as the sunnier days settle in, in the hopes of catching the wave of buyers who will be waking up from hibernation. That said, if you're one of the hundreds who are looking to cash in on your investment, then you're most likely in the process of planning the specifics of your impending sale, figuring out the 'how' and the 'when'. But one important and daunting task in your planning process is figuring out your property's asking price.
And as we all know, setting your 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 you, the seller, to decide.
And although sellers aren't required to price according to inventory levels or the market condition - though it is wise to do so, it is a smart thing to discuss these things with your agent early so you can form an informed decision in the days leading up to your home's listing on the market. 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. Using 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. 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.
David Paez has been successfully in the business of buying, selling, and renting homes for over seven years. He is actively aiding willing sellers in disposing their investments. List your home now and reap the financial rewards! Call David at (617) 549-9783 and schedule a risk-free consultation and find out he can get you the most return on your investment.