Set the selling price of your home
Pricing your home appropriately to attract serious buyers is the most important factor when selling your home. While you obviously want top dollar for your home and want to be taken seriously, avoid making the common seller mistake of pricing your home too high which is almost always non-productive. It helps to consider if you would pay the sales price if you were a buyer. Buyers will be comparing your home’s price with others on the market – if your home is priced too much above market value, it won’t be picked for viewing as it looks too expensive compared to other houses for sale. You also don’t want to short-change yourself by setting the sales price too low because you’re uninterested in bargaining.
Another common seller mistake to avoid is pricing your home based on what you hope to net, since you can only control the asking price and not the final sales price. Keep in mind that the sales price is part of the overall package which should include other terms and conditions favorable to you as well.
Ask your realtor questions and do your own research to become an informed home seller, as the final decision about how much to ask is ultimately up to you.
Price for Market Conditions
The asking or list price of your home should reflect the property value, your motive for selling and market conditions. If you need to sell quickly, getting the highest price is not likely as important as a quick close. It helps to know the bottom line selling price you are willing to consider in order to quickly eliminate ridiculous offers and save time. Understanding the market conditions (hot/cold/normal, etc.) can also help you establish a realistic selling price that is equitable to you and attractive to buyers. In a hot seller’s market where prices are rising and demand is strong, it may work in your favor to price a little above what you expect, but a neutral or buyer’s market with large inventories may dictate a more cautious and conservative pricing approach.
If you are able to sell at above market price, be aware that the buyer’s lender may not approve the mortgage if market conditions don’t support the sales price – causing the deal to fall through and your home to go back on the market. It typically becomes harder to come by a decent offer when your home sits on the market too long or comes back on after being taken off the market, so you can see how critical setting the right price is for a successful sale.
Comparative Analysis
Your agent can provide a list of sales prices on active homes for sale or for recently sold homes in your neighborhood like yours as a guide to help you set a list price. This document, called a Comparative Market Analysis (CMA) can show you helpful information such as comparable list and final sales prices (“comps”), and how long previously sold homes were on the market (Days On Market – DOM). Understand that this data works both ways – while you will use it to create a top price you believe the market will bear, buyers will use it to find reasons to reduce their offer and arrive at the lowest price possible.