4 things canny home sellers do when pricing their homes.
Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data.
Smart sellers know that crunching the numbers is always the better route to an accurate home price. Here’s how they do it.
#1 Avoid Overpricing
Homeowners often think that it’s OK to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process. Time, money, buyers, and market longevity can create a cloud on your home.
#2 Don't Expect Dollar-for-Dollar Returns
It’s easy for homeowners to stumble into two common traps:
Conflating actual value with sentimental value — how much they assume their home’s worth because they lived there and loved the time they spent there.
Assuming renovations should result in a dollar-for-dollar increase in the selling price — or more.
Renovation pitfall is being the nicest home in the area, makes it harder to sell. That’s not to say that renovations aren’t worth it. You want to enjoy your home while you’re in it, right? Smart renovations make your home more comfortable and functional but should typically reflect the neighborhood.
Another culprit for many an overpriced home is online tools, like Zillow’s “Zestimate,” that prescribe an estimated market value based on local data. The estimate is often wildly inaccurate.
#3 Use Comparable Sales (also Known as "Comps")
The best pricing strategy? Consult a real estate agent, who will use something called comps (also known as “comparable sales”) to determine the appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.
Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home.
After crunching the data, they’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly — not idealistically — is a sure way to avoid the aches and pains of a long, drawn-out listing that just won’t sell.
#4 Adjust the Price When Needed
Once your home is on the market, you’ll start accumulating another set of data that will serve as the ultimate price test: how buyers react.
Easy way to tell if your overpriced: no showings.
When it comes to finding a buyer, pricing your home according to data — and the right data, at that — is crucial to making the sale.