In maximizing value when selling your home, a proper pricing strategy is one of 3 things a home seller has control over. The other 2 variants, the home’s condition and marketing, are as important. But those options are more tangible; you can physically see home improvements and you can see marketing results through analytics and data results. Plus you can continually work on those factors. With pricing, it’s a bit trickier – you want to get it correct right away. If a home for sale is initially priced too low, the seller loses dollars. Price it too high, and the seller loses buyers. The end game is to sell the home for the most amount of dollars in the least amount of time. There is a strategy to that goal.
Timing and pricing are interlaced. It’s imperative to price a home appropriately at the start. Interest in a particular home peaks when it’s first listed, especially in the super-competitive Boulder County real estate market. The first weeks are when the greatest number of real estate agents and prospective buyers come to see a listing. Therefore, the highest chance to sell a home at a fair market value is when it first goes on the market. (Don’t confuse “fair market value” with “low price”.) If the seller’s mindset is to ask well over fair market value and either pull it from the market if it doesn’t sell or drop the price, chances are they won’t get as much the 2nd time it’s listed. The home just got a “something must be wrong with it” stigma. Additionally, if a home sits on the market for months on end just waiting for the right buyer to come along, the seller needs to consider each mortgage, HOA, insurance payment that comes each month. It may be costing a seller more to sit on a property and pay monthly fees in the long run than it is to price the home properly in the first place!
Next after timing comes the variable of potential buyers. If a home is overpriced, the seller loses traffic through the house; there are “sweet spot ceilings” of what home buyers are willing to budget. If a seller’s actually willing to take, say, $595k for a home but price it at $650k, they’ve lost the volume of traffic of those buyers who won’t look over $600k. Pricing a home fairly in the current market creates a feeding frenzy that Shark Week can only dream of. And perhaps those buyers who thought their firm budget was $600k will actually bid more than asking if they love the property. But if they didn’t come to see it in the first place, there’s no bid. According to the National Association of Realtors, 60% of potential buyers will look at a property priced at market value. If priced just 10% higher than market value, that number of potential buyers drops to 30%. At 15% over, only 10% of buyers will look at the home. Sellers need to set themselves up for the maximum amount of bids so that they have the best-qualified buyer and the most favorable offer on the table.
On the flip side, price too low and money is left on the table. This could be caused by homeowners who don’t have their pulse on the up-to-the-minute market. They might not even realize how much their property has appreciated. I create a competitive analysis for all properties I list to be sure the home is priced for what the market will bear. No seller should be willing to accept less money than their home is worth!
I help sellers determine the correct pricing strategy right off the bat to ensure the home is sold as quickly as possible for the right terms. You can see how pricing too high, even in the strong Boulder area housing market, can backfire. And really, why would anyone intentionally price too low. With consideration to market conditions, comparable properties, and knowing the levels of potential buyer’s budgetary sweet spots, my strategies have given sellers an advantage in selling their homes. My Market Watch tool will list MLS homes for sale in your neighborhood so you can see what price they’re asking Or, contact me and I can walk you through what a fair market value is for your home. The price has to be right!