What’s the best list price for your home?
You obviously want to sell your house for the highest possible price. You may even have a number or specific range in mind that may have been the result of having a Comparative Market Analysis or Market Evaluation completed on your home.
But, how do you determine if the price at which you are considering marketing the home is reasonable? You may be concerned that:
- If you list your house too high, few buyers, if any, will see it.
- If your price is too low, you could end up leaving thousands of dollars on the table.
Don’t worry. I’m an expert at creating a pricing strategy that will pique the interest of buyers – and set the stage to get you the highest sale price possible.
A couple of concepts that I want you to consider as part of the pricing strategy:
- Concept 1: Set the price right on day 1 This is important! Buyers that are in the market, but have not located their dream home will be waiting for homes to come on the market. If they are using a system such as my listing alert service, they will know immediately when new homes that meet their specific needs hit the market. This is the best time to receive an offer by having a well-priced home! If the home is over-priced, you will probably not receive offers that you would have otherwise received if the home was priced right from the start.
- Concept 2: Avoid being right above a range Most buyers are pre-qualified for a certain amount or range. For example, a lender may tell a prospective home buyer that they can afford a home priced no more that $225,000. The typical agent will locate and show only the homes that fall within a range, such as $200,000 – $225,000. In my experience, it’s best for the price of the home not to be above a notional range, i.e., not right above $220,000 or $225,000. In this example, it’s better to price the home at $224,900 than it is $225,100 simply because you may miss buyers due to their agent pulling and showing only those homes within this “notional” range. When I am helping buyers find their dream home, in my research I will look at homes that are above the buyer’s maximum qualification amount – I do this to see if there are homes that I could potentially negotiate down to a point within the buyer’s range. I don’t think this strategy is typical of agents, so keep in mind the concept of range.
- Concept 3: Hold firm on a lower list price It’s better to hold firm on a lower list price than it is to have a higher price with “built-in flexibility to lower the price later”. To follow on with our example, instead of listing the house at $227,900 with $3,000 worth of flexibility (to help buyer with closing costs, etc.), I highly recommend that it’s a far better strategy to list at $224,900 (remember range!) and hold firm on the price. At this point you will have a buyer with an offer on the table that you may not otherwise at the higher list price. In most cases, the sale price in the offer can be negotiated upward if the buyer needs to have closing costs rolled into the mortgage, potentially giving you the same net as the higher list price!
- Concept 4: Best last check on list price When I sit down with a seller to do an analysis of price, there’s no doubt in my mind what the most important check is as far as the pricing strategy. In our example from the previous concept, if we are considering placing your home on the market with a list price of $224,900, our final analysis should be to take a look at the current market and ask “if a buyer has a bag of money with $224,900 in it, what else could he or she buy?”. It’s important to think as a buyer would and list the home at a price competitively to stimulate an offer. Remember, at this point in the buying process, the prospective home buyer is not thinking of appraised value (and neither should you!): They are most likely thinking about finding the best price for a home that meets their needs and desires. Appraisals typically come after there is a agreed upon contract.
- Concept 5: Never select an agent based on an inflated price This is a big mistake! If an agent suggests a list price that you know is well above what your home could sell for, I recommend that you don’t list your home with him or her. Typically, homes that are listed with an inflated price will go through several price reductions, and if they are sold, they will have been on the market for an extended period of time. Do yourself a favor here: look at the homes currently on the market and ask yourself “If I were a buyer in the market, would I make an offer on my home or one of the others?”.
- Concept 6: Select an agent based on the complete package When selecting an agent, don’t base your selection only on the suggested price. Make sure that the agent can demonstrate a thorough analysis at arriving at the price, you are comfortable with the price, that the price competes well in the current market, and that agent has a great marketing plan. Pricing is only one factor that affects the sale. If the home is priced favorably, but the marketing campaign is lacking, you may be in the market for a long time!
When I sit down with you, I will go over a thorough pricing analysis and the elements of my Power Listing Plan to show you how I will market your home to give you the best opportunity to get the best price in the shortest amount of time – all at no obligation. I believe that it is a disservice to sellers, in line with concept 6, to provide only a Comparative Market Analysis and not go over the game plan to get the home sold.
Get my Power Listing Plan!
I enjoy marketing and helping Sellers reach their goals. I would love to help you get your home sold.
Contact me directly and be confident knowing you will be working with a professional that will be looking after your needs.
I look forward to serving you! -Carl
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