Strategic Pricing
Listing a home has many moving parts. There are photos, descriptions, websites, staging and so much more. All these things matter in their own way, but one in particular can make or break your listing. That factor is Price. It can be stressful to many sellers. It’s one of the hardest parts to get through in a listing presentation, which is why I tend to tackle it first, head on. I’ve written about price in back issues, but I wanted to share another factor in pricing that you may not know about.
Once you have determined an approximate price on a home based on comparable properties, you need to see how that plays out against other listings in the area. Does your price fit within the other sales as far as price per square foot? Are you taking into account the current market trends? Does your price hit a certain range price that hits the right search criteria? That last one is part of what I call strategic pricing. Let’s say your home estimate comes in at 397K. You need to take into account on how that falls into home search portals. Many portals allow buyers to search in increments of either 10K or 25K. So, take this 397K priced listing. In a search between 350K and 400K, this home would show up in the search results. That’s a good thing! However, what about the homebuyer looking 400K to 450K? This home would not appear in their search results and be missed by just 3K. This could be the perfect home for them, but they simply don’t see it in their results. The solution? Price right at 400K. This ensure that both ranges get covered. This also allows wiggle room for sellers, as many buyers tend to offer below the list price. You have to allow for this, or risk a deal blowing up because of the emotional discourse when a buyer feels a seller is not flexible and sticking to 100% of their list price. In other cases, there are homes that need repairs. You COULD price it accordingly, but no matter how you spin it, you get lower offers. Take, for example, a listing I had recently. The seller had it inspected prior to listing, we priced it accordingly, and even attached the home inspection report to the MLS. Despite the fact that we mentioned to buyers that the price was based off the needed repairs, they would still offer 25K off the list price. The solution? We bumped UP the price by 25K to offset the deductions and ended up with the original list price! Now, this doesn’t work in all occasions, but it does help you get closer to the pin. The point is to not price your home based just off of the comps. Be willing to test the waters and see how consumers react. I am what I call an “optimistic pricer” and while sometimes there can be a slight appraisal issue, at least you know you did your best to maximize your financial position. Don’t be lured into listing lower by an agent who just wants to sell your home fast and move on. It could cost you thousands! If you have questions about your home’s value, I am just a call away! 321-293-2240.