The following is from an article on Inman.com by Jeff Gould about pricing your home to sell in a competitive market. It may seem counter-intuitive, but setting the price of your home too high will actually cause you to get less in the eventual sale than if you would have done the appropriate research and priced your home in a range where it may induce a bidding war and net you more money in the end.
Listing your home for how much you want or need to get is wrong. Truthfully, it does not matter what you want or need to get for a home. That is a poor pricing strategy. The fact is, a home is worth exactly what a qualified buyer is willing to pay for it. What you want or need has no bearing on that.
The key to selling a home for top dollar is to strategically price the home. To do that, you need to take a detailed look at similar homes that recently sold in the area. Hire a real estate agent who is an expert in the area where you are selling your home. Know the average current days on market for the homes that sold. Using this data, interview real estate agents and find out how many days on market their homes that are currently for sale and recently sold are averaging. Also find out how many price reductions were needed and how much those price reductions were. An agent who has an average days on market higher than the current sold average or multiple price reductions that total more than 10 percent is either not very good at marketing or is overpricing his listings.
You may think it’s that one additional kitchen upgrade or perfectly staging your home like it is going into Architectural Digest that is going to be the tipping point to capture the perfect buyer, but sometimes all of those great upgrades and effort that you have put in can be negated by pricing your home higher than the market warrants.
Naturally, all sellers want to get the most money possible for their homes when they sell them. There is one item that, if not perfect, will cause your home to sell for less than it should — that single item is the price.
Pricing your home properly to begin with is without question the single most important factor to selling your home for top dollar. It is a delicate balancing act that, when done properly, positions your home perfectly in the marketplace to sell for the absolute highest possible price. When the home is priced too low, it will sell quickly but for less money than it should. When the home is priced too high, it will sit on the market for a long period of time and ultimately sell for less money than it should.
The biggest mistake I see all the time by owners selling, as well as by real estate agents, is overpricing a home to start with and having to reduce the price multiple times. When a home is listed for sale, it reaches the highest number of potential buyers the first few days it is on the market. If a home is dismissed as being overpriced early on, you will lose potential buyers.
Typically, buyers will flip through listings online; they look at the main home photo first, then they look at the price. If the potential buyer does not like either of those items, they will move on to the next listing. Be honest: How many times have you done that? I do it all the time.
read more about pricing your home to sell from Inman.com here:
photo by Flickr user 401(k) 2012