💲 Why you should price your home right from the start
In today’s market, where demand is outpacing supply in most regions of the country, pricing your home is one of the biggest challenges real estate professionals face.
Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.
1. THE FIRST TWO WEEKS ARE THE MOST IMPORTANT
During the first two weeks on the market you’re bound to get the most activity on your home. You don't want to overprice the property because you'll lose the freshness of the home's appeal after the first two to three weeks of showings. Demand and interest wane after the first two weeks.
Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes.
Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges.
2. DRAW THE MOST ATTENTION, TO THE RIGHT BUYERS
When a home is overpriced it lowers the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house.
For example: when a buyer is looking for a home online (which is where 95% of searches begin), they put in their desired price range. If you are looking to sell your home for $200,000, but list it at $225,000, any potential buyers that search in the $150k-$200k range won’t even know your listing is available, let alone come see it!
One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.
A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house.
If you only receive one offer, you are set up in a position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you.
Bottom line:
Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home.
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