Here’s a closer look at how you should approach pricing your home for sale.
As I’ve touched on in previous videos, three specific factors translate into selling a property for the highest price and best terms:
1. Price the home right.
2. Make the home look as good as possible with the resources available to you.
3. Leverage online and offline marketing to get the word out about it.
Let’s take a closer look at the first of those factors; though we know the price you set for your home isn’t everything, it’s certainly darn close. Whether you have a newly remodeled home or a complete fixer-upper, it always comes down to price, right? If you’ve priced your home according to its condition and that number is in line with what buyers in your area are willing to pay, then you’re on the right track. Unfortunately, too many sellers in our market are overly optimistic about their advantage and are therefore overpricing their homes.
Even in a persistent seller’s market like ours, you must price your home appropriately, if not even a tad aggressively. Doing so will help you expose your home to the largest number of people, generate a high volume of showings, attract strong offers, and ultimately lead to a fantastic sale price (assuming your agent did everything they were supposed to do). Several pricing strategies can be implemented, but ultimately, your approach should be dependent on the type of home you have. For example, if yours is a unique property that’s in an area where comparable sales data is scarce, perhaps you should go ahead and price high just to see what the market will bring.
However, many of the homes we sell in Orange County tend to have a lot of model matches that give us a good indication of what that home is worth. Oftentimes, homes will sell for a range; some homes have been upgraded while others boast better locations, and others still may require a bit of work. Depending on different factors like upgrades, showability, and (most importantly) list price, any specific home in a given area could sell for somewhere between $900,000 and $1 million.
So, if homes in a specific area are selling for a range like that, then fair market value would be roughly in the middle. Slightly aggressive would be somewhere under $900,000, whereas aggressive would be above $1 million. There are pros and cons to each strategy. If you price high, you just might get lucky and fetch your price, but know that it’s not likely.
“You could lose anywhere from 2% to 4% on your potential sale price due to the wrong pricing strategy.”
Today’s buyers are savvier than those of yesteryear, with boatloads of information and user-friendly real estate tech at their disposal. We’re just not seeing many buyers significantly overpaying for properties in our current market.
The most likely scenario if you price high: You sit on the market, have a few showings, lower your price a little, have some more showings, lower your price once again, and then toil away in this fashion until you finally decide to just sell to someone out of desperation. I see this happen all the time. You could lose anywhere from 2% to 4% on your potential sale price due to the wrong pricing strategy.
The second approach you could take is to price your home within market value and show buyers that you’re motivated by cleaning it up and making it look stellar. In that scenario, you attract multiple offers and sell for a great price.
Here’s the third and most successful strategy we’ve been seeing in our market lately: pricing the home slightly aggressively. We know demand is high, rates are low, and everybody on the planet wants a great deal. We also know it’s possible to price your home too low—too many offers pour in, and deciding which one of out 30 has a legitimate chance of closing at the best terms quickly becomes a major stressor for sellers. Pricing slightly aggressively, therefore, is the sweet spot where you’ll be able to maximize exposure.
There’s no one-size-fits-all pricing strategy, but the bottom line is that your list price has to be in line with the expectations of buyers in your market if you want to create the reaction you want. As always, reach out to me by phone, email, or direct message if you want to chat about your particular selling plans. I’m always here to help. Happy selling!