The Power of Pricing

Tips on Pricing Your Home for Sale

Pricing a home for sale is as much an art as it is a science. Here are some tips on what you should consider:

• Pricing your home at or below fair market value attracts buyers.
• Overpricing your home never attracts buyers.
• Pricing your home right the first time is crucial because you only have one chance to make a first impression.
• The market never lies, but it can change its mind.

Fair market value is the price at which a willing buyer under no compulsion to buy and a willing seller under no compulsion to sell would agree by contract is a fair price for a home. It is an abstract value when a property is listed for sale, but implications can certainly be made as to fair market value based on recent transactions.

Valuing Your Home

In a community of similar homes, why is one worth more than another? The answer is simple.

Every home is different.

Some factors that come into play when determining the value of a home are:

• Location - the closer a home is to jobs, parks, transportation, schools, community services, etc., the more desirable it is.
• Size - square footage impacts home values because bigger is more expensive to build and uses more materials, and larger lot sizes means more privacy and room for activities.
• Number of Beds and Baths - over time, median homes have grown larger. The median home purchased today is a three-bedroom, two-bath home.
• Features and Finishes - features such as outdoor kitchens and spa baths make a home more luxurious. A home finished with hardwood floors and granite countertops is going to cost more than a home with carpet and laminate countertops.
• Condition - the closer a home is to new construction, the more it retains its value. It's perceived as more modern, up to date, and perhaps safer. Homes that are not updated or in poor repair sell for less.
• Curb Appeal - from the street, a home that looks clean, fresh, and inviting is appealing. Fresh landscaping and flowers won't change the size or location of the home, but it can certainly make it more charming.

Even when two homes are identical in the same neighborhood, one may be priced higher due to something as simple as the views from the windows, the paint colors, or the overall taste of the viewer.

Try to Avoid Overpricing Your Home

Sellers often view their homes as special, which can tempt them to put a higher price on their home, believing they can always reduce the price later. This can be a serious mistake because overpricing prevents buyers from ever looking at the home. Most buyers look at homes by price range, and then look for the best value in their price range.

Your best chance of selling your home is early in the marketing process when your home is fresh on the market and an exciting prospect to buyers and their agents. If you don't get many showings or offers, you may have overpriced your home and it is not comparing well to the competition. You can't change the location, so you'll have to continue to wait, improve the home's condition, or lower the price.

The market is not lying to you, but it can change its mind and give your home another chance. By then you may have lost precious time and perhaps allowed a stigma to cloud your home's value.

Intelligent Pricing

Intelligent pricing is not about squeezing every last nickel out of that one buyer who falls in love with your home. It is about getting your home sold quickly at fair market value.

Your agent can do a market analysis and give you advice as to where you should price your home. You can also use our site to research comparable properties and sales histories. Together, you can make an informed decision as to how to price your home for sale.