While many potential sellers might think that the hardest thing about selling their home is getting it ready to list or perhaps keeping it clean during the entire selling process, the truth is that one of the most challenging aspects of selling your home is coming up with the best listing price.
A lot of emotion plays into the process of choosing a listing price for your home. After all, it’s your home, and no one loves it like you do. Because of that, you may have an exaggerated idea of what kind of price your house will bring and someone telling you that’s not the case may hurt your ego. But if you’ve hired an experienced agent who knows your neighborhood and knows how to price your house, they can certainly guide you in the proper direction. Nonetheless, if can be a real challenge to come to a meeting of the minds, but it’s a necessary first step in the process, and a little give and take might be required.
Below, we’ve listed some tactics for your consideration and to help you better grasp what is necessary to come up with a price that will help you not only sell your house but sell it promptly.
The chances are that if you’ve sold – or bought – a home in the past, you’ve heard a Realtor talk about “comps.” Locating comps – or listings that are comparable to your home -is something every Realtor does, usually after their first visit to your home. A list of comps shows other homes like yours that are currently listed for sale in your area and others that have recently sold.
The mistake that a lot of new agents and homeowners make is concentrating on the LISTING prices of those homes, not the sales price. It is the selling price that provides the best look at a home’s real worth.
And make sure the homes are comparable. Just because your house is in the same neighborhood of a home that recently sold for $300,000, for instance, it doesn’t mean your home's price should be the same. Remember to look at more than just the location. Some bedrooms and baths, overall square footage, lot size, and age are all important.
And, above all else, remember that you need to detach yourself from the pricing process emotionally. You also can’t consider what you paid for the house or how much you “must” come out with at the end of the deal. Those have no bearing on the current value of your home.
Don’t Be a High-Baller
A lot of sellers think it’s a good idea to price high first and then allow the price to come down as needed. Even if you’re not in a hurry, that’s not always the best strategy. As a matter of fact, it’s RARELY the best strategy.
Often, sellers believe that if you price a home higher than what it is worth, you’ll receive some buyers who will be content to make an offer and see if they can get it at a lower price. That’s not always how it works. More often, sellers who are not searching in that higher price range will simply skip over your house and not look at all.
So, in actuality, it’s better to choose a price close to what the comps show is correct and you’ll stand a higher chance of receiving multiple offers. At that point, the buyers may have to work to get noticed, making their best offer possible. In the end, everyone is a winner as the house will be sold at a fair price and promptly.
Choose a Strategic Number
Just like many retail establishments, Realtors often end their prices in the number 9. For example, instead of listing your house at $300,000, the decision may be made to list it at $299,000. This list price is a good home selling price strategy because it may help you appear more often in online searches based on price. For example, if a potential buyer wants to see a list of houses under $300,000, your home will not show up if it is listed exactly at $300,000 but WILL show up at $299,000.
To make it a little bit more interesting, consider coming down a thousand dollars or two if you can afford to do so. That puts you in front of all the others listed with 99 for their last number. But don’t get too weird with the figures.
One popular real estate training program suggests that agents help their sellers chose an unusual number, like $287,122, but we haven’t found that strategy to be helpful. It just seems to call negative attention to the property and the homeowner and agent. So, stick with numbers that end in 999 or even 500.
Talk about Price Changes before you List
It’s always a good idea for the listing agent and seller to have a frank discussion about price adjustments before that “For Sale” sign goes out on the front lawn, especially if you’re listing your home for higher than that suggested by your Realtor.
For example, it might be desirable to craft a signed agreement between the two parties which states that the seller agrees to lower the price an absolute number of dollars if the home doesn’t sell in 30 days, 60 days, 90 days. Doing this ahead of time helps avoid a lot of awkward conversations, which can often strain the seller-agent relationship.
It’s always important to remember that discussions about price don’t happen just once. The chances are that you may need to talk about it more times than just at that initial meeting. Things happen. Market conditions change, and sellers timelines change.
That’s why it’s important to shop around for a Realtor who specializes in your neighborhood and knows the other comparable homes. And once you’ve hired him or her, trust you made the right decision and if you heed the suggestions of your experienced agent, you may find that the offers come rolling in much more quickly than you’d suspected they would.