There’s a lot that goes into pricing a home to sell quickly and successfully, but the most important factor is choosing the right listing price. Too high, and the house can languish on the market, becoming stale and often forcing a price reduction. Too low, and you miss out on some significant profit. Your real estate agent will work with you to come up with the right price, taking into consideration the factors below.
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Using a CMA to Price a Home
Usually as a first step, your realtor will compile a Competitive Market Analysis (CMA) to gather information about similar homes in your area that have recently been on the market. A comprehensive CMA can reveal a lot: how long it’s taking homes like yours to sell, how much they’re selling for, and how they compare in amenities and condition. A thorough CMA gives you a solid pricing range that your home will fall within, and you and your realtor can refine it from there.
Selling a Home by Scoping Out the Competition
The CMA provides a lot of useful data on listings that have sold or expired, but what about nearby houses that are currently on the market, your real competition? Again a thorough CMA will be useful, as it provides info on properties that are currently listed as well. It may be tempting to list your home for the same price as the one down the street, but they likely have several differences. If yours has an additional bathroom or an updated kitchen, for example, you can set your listing price higher. Assessing the competition on every level allows your realtor to give you an honest appraisal of your home’s comparative strengths and weaknesses.
Do Nines or Zeroes Sell Your Home Faster?
You’re probably familiar with the strategy of pricing a home just below a certain threshold, like $399,900 instead of $400,000. This can work well because psychologically, the lower price seems like a much better deal, even though the actual monetary difference is quite low. At the same time, buyers have more resources available to them than ever before, and they do their research. Pricing a home at the full $400,000 can double its exposure; the home will show up in searches for both a $300,000 – $400,000 and $400,000 – $500,000 price range. The CMA and the comparison of other homes for sale in the area can help determine the best course of action in each specific case. It is worth having this discussion with your realtor and finding out his or her perspective on the best strategy.
The Bottom Line on Pricing a Home to Sell
While there are additional factors that come into play when pricing a home, such as time of year, supply and demand, and market fluctuations, the right price is ultimately the maximum amount that a buyer is willing to pay. It’s important for sellers to keep emotion out of the process, which can be understandably difficult. Take the time to speak with a few realtors to get a sense of how they will approach the sale. One realtor may think the best strategy is to sell the home as-is for a lower price, while others may suggest investing in some upgrades and listing higher. In some cases, the real estate agency will split the cost of the upgrades with you, and you don’t pay for them until the home sells. Your individual goals and circumstances will dictate the route you want to take. Ultimately, going into the sale with the right home price will ease the overall stress of the home-selling process.
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