Pricing your home correctly is critical to your success as a home seller. If you set your price too low, your home may sell quickly but you may end up without enough money to effectively pay for the cost of a move or a new home. On the other hand, if you set the price too high, your property could sit on the market for months.
Here are some guidelines to keep in mind when pricing your home.
Your Home’s Original Purchase Price is Not a Factor of Its Current Price
No matter how much – or little – you paid for your home when you originally bought it, those figures don’t necessarily have anything to do with the sale you’re about to undertake. The truth is, markets change. Your home might be worth a lot more or a lot less now than when you first purchased it.
Not All Improvements Add to the Value of Your Home
In fact, many homes are over-improved for their size or neighborhood. While some improvements, such as the addition of extra rooms or a garage, do add value, others are more of a matter of taste and style. Unfortunately, you won’t be able to count on your favorite improvements meaning anything to a prospective buyer.
If You Overprice, You Actually May End Up Selling for Less Than Market Value
It may sound shocking, but think of it this way: If your home is overpriced, buyers in that price range will likely opt to purchase larger homes in favor of yours. And at the same time, your best prospective buyers may never even get to see your home because they’ll perceive it as out of their price range. In this scenario, your home will end up on the market for much, much longer – adding to your carrying costs – and you ultimately may need to drop the price below market value in order to offload the property.
Pricing is the Market’s First Impression of Your Home
New listings create excitement in the market, as agents are always eager to find something new to bring to their prospective homebuyers. Because of this fact, your home will get the most activity – and likely its best offers – within the first 30 days of its listing. If you price your home too high, you might miss out on some of your best early-bird prospects. Too low, and you may turn off buyers who could end up looking at your home and wondering if there’s something ‘wrong’ with it. And eventually, your listing becomes old news, even ‘stale’, and over time, overlooked.
The good news is, much of this confusion (and its potential consequences) can be easily avoided by asking a real estate agent to perform a Competitive Market Analysis (CMA) for your home, which will give you much better insight into your property’s real value in the current market.
If you’d like a Competitive Market Analysis performed for your home, as well as more in-depth guidance on the ins and outs of selling your property, the real estate professionals here at RE/MAX Results are happy to help. Feel free to reach out to us any time – we’re always here for you.