Last Updated on September 2, 2022
Can you guess the number one reason homes sit stagnant on the market?
Incorrect pricing.
It doesn’t matter if it’s a sellers’ market and homes are going under contract in less than 24 hours– an incorrectly priced home will always sit on the market. Getting ready to sell your home? Watch out for these 4 home pricing mistakes.
Not using comparative market data
To appropriately price your home, your Realtor will use a combination of their market knowledge and comparative market data. Comparative market data analyzes homes in your area that have similar square footage and the same number of bedrooms and bathrooms.
Your Realtor will evaluate those figures, while taking into consideration the listing and closing prices. Additionally, the offering price your Realtor proposes will likely be increased or decreased based on how updated your home is.
Keep in mind that a buyer’s agent will present this same data to their client, and prospective home shoppers will know instantly if a home is priced above or below market value.
Pricing your home too low
Most of the time sellers want to price their home too high, but occasionally, some sellers want to explore the strategy of pricing their home lower in attempts to drum up excitement.
Even in a red hot seller’s market, this strategy simply doesn’t work. Psychologically speaking, when buyers see a price associated with a home, they assume that’s what the home is worth. It’s highly unlikely that a potential buyer would walk through a lower-priced home and determine that it’s underpriced and decide to offer more than the asking price. A more realistic scenario is a buyer assumes a home is priced lower because there’s something wrong with it.
Pricing your home at market value in a strong market is likely to cause a stir anyway, and potentially cause a bidding war–thus driving up the offer price.
Using emotion to price your home
It’s hard to put a price tag on your home; in fact it’s utterly impossible not to bring your own biases into a conversation about your home’s worth. Rather than run the risk of incorrectly pricing your home, remove yourself from the situation and hire a Realtor you trust to accurately price your home. It’s in your Realtor’s best interest to help you obtain the highest price the market will give you for your home, so rest assured you can trust the professionals on this one.
Not adjusting the price soon enough
Sometimes, despite using comparative market analysis to appropriately price your home, a home will sit on the market. Rather than insisting that the market is wrong and your home is aptly priced, discuss your home’s price frequently with your Realtor after you list your home. Holding out for that higher price point can often backfire, leaving your home to grow stale and often causing buyers to wonder what’s wrong with your property.
Related reading: The complete guide to selling your home
Interested in determining how much your home’s worth? Use our free online tool designed to give you a rough estimate of the value of your home. Consider this just a starting point, as a Realtor can give you a more concise price for your home.
