As a seller, pricing strategy is almost EVERYTHING! Almost every home will sell when it is up for sale, the question is, for how much? The two biggest factors in the home selling process is pricing and marketing. Most commonly, pricing is the hurdle that buyers have to jump with the seller. So why is pricing your home so important?
Demand:
Housing demand is and has been higher than the supply of homes for almost a decade. This is what is keeping prices high, it's simple economics. Demand is the biggest deciding factor in a home's value and what someone is willing to pay for it. However, demand will only go so far in getting you the most money for your home. When an area is in high demand, the chances are getting the most money possible goes up for the seller, but still there will always be a cap in what a buyer is willing to pay. ALWAYS!
At the end of the day, the market will tell you what your home is worth. We see this all the time as real estate agents, buyers will offer what they feel the home is worth, whether the seller feels it is priced right or not. The home's value can also be subjective though. Joe smith with a family of 5 may be willing to pay more for the big home in a great school district and safe neighborhood than the retired couple who's kids are all grown up would be.
Your job as a seller, is to work with your trusted real estate advisor to price the home properly, based on comparable sales, the area's demand, and the home's features. Make sure you note all the details of the home and the improvements you have made so your agent can make an accurate pricing strategy conducive to your real estate goals.
What's the best strategy?
Let's answer this question. What happens when you see a home online that seems like it was overpriced? Exactly. You think to yourself, "Wow I would never pay that much for that home that seller is crazy". The truth is, if you list the home higher than what the market is suggesting it is worth, it tends to sit on the market for a while. And what happens when a seller has been on the market for 2 months and is eager to sell? That's right!! They drop the price. For a seller, this is only detrimental to getting the money they're hoping for.
In our experience, the best strategy to pricing a home is taking into consideration all of the comparable homes that have sold in the last 6 months, then pricing the home at, or just below, what the market suggests it's worth. This creates buyer demand! If buyer's feel they're getting a good deal, they're going to jump on it as quickly as possible!
What happens when multiple buyers want the same home and make an offer? A bidding war! Bidding wars were super common in 2020 and 2021 due to buyer demand being at an all time high, and home supply being near an all time low. What we saw during those 2 years was that most homes had multiple offers, buyers competing to win the bid, which ultimately drove up the prices and values of homes! This is THE trick to getting what you want or more for your home.
Conclusion:
We've covered pricing strategy and what drives pricing and values in the real estate market. Now that you understand what allows a home to sell for top dollar, you understand what you might need to do in order to get the most money for your home. You also need to evaluate the difference between wanting and needing to sell. If you "need" to sell, the best thing to do is to price the home appropriately to ensure it gets sold.
The best thing you can do for yourself when selling, is contact your trusted real estate agent, and see what the market is saying your home is worth. From there, you can work with them to decide what work you might need to do to the home to get top dollar, and start working to get the home ready! Pricing your home appropriately will allow you to almost guarantee yourself to sell the home and make the most money possible at the same time!
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