4 Steps to Take to Come With a Solid Listing Price

Coming up with the right listing price for a home is not as easy as you might think. While you might be tempted to throw a big number out there to reap in the rewards, this strategy typically doesn’t work. Failure to carefully choose the right listing price could leave you in the dust among your competition.

Here are 4 tips for nailing the perfect listing price for your home.

1. Think About Price Reductions

That’s right. Before you even list your home at a specific price, you should discuss any possible price reductions that might have to happen somewhere down the line. If you’re not in much of a rush to sell, then time is your friend.

If there aren’t many recent comparable sales in your neighborhood, the market value range of your home could vary greatly. In this case, you could effectively go for a higher listing price, given the fact that a price reduction or two in the future won’t really hurt much.

If you do decide to list at the higher end of the price range, discuss with you realtor how much you’re willing to drop the price after a specific amount of time. You can then use a price reduction strategy to garner more interest and get more buyers to look in your direction. 

2. Don’t Assume a Low Price Means Many Offers

Just because you price your house at the lower end of the price spectrum doesn’t guarantee that the offers will be flocking in. There are always situations where a home sells for well over the asking price. And when home owners hear these stories, they automatically assume this will happen to them too if they price low. But just because the guy down the street had five offers within 24 hours of listing his home, that doesn’t mean the same will happen to you.

Of course, many homes with multiple offers are often priced purposely to boost offer action. Most of the time, however, these properties are located in highly desirable areas, and are prepped to show impeccably.

If you want to take a chance on listing your home at the low end of the price range in hopes of getting a few offers on the table at once, be prepared to take that price. It won’t look too good to other buyers if you decide to up the price a few weeks into your listing.

3. Understand the Real Market Value of Your Home

The price you eventually sell your home for won’t necessarily be exactly what you want, or what you believe your home to be worth. The real market value of your home is the price that a buyer is willing to pay for it.

If your home sells within hours of the listing going live, maybe it was priced too low. On the other hand, if it’s been weeks with no offers coming in, maybe it’s sitting too high up on the price spectrum. Steady interest and action on a listing typically happens when the home is priced just right.

This is why it’s imperative to study similar homes in the area that have recently sold to get a clear idea of what the going rate is in the neighborhood. If a buyer knows that homes similar to yours on the block have sold in the $300,000 to $325,000 range, they’re not going to want to fork over much more than that for your home, unless there’s something truly special and unique about it.

4. Price the Home so it’s Found in Real Estate Searches

The majority of buyers will tell their agents exactly what they’re looking for, including the price range they can afford. Their agent might then set up an automated search in the MLS or local database for properties that match the buyers’ criteria.

For instance, if a buyer is looking for a 3-bedroom bungalow for no more than $500,000, they’ll miss your listing if your 3-bedroom is listed at $510,000. If you list the price too high out of the gates, you might miss a good portion of buyers.

Pricing a home for sale isn’t as simple as picking some random number out of thin air. There are a number of factors that are involved in determining this crucial number, and not all of them can necessarily be predicted.

Be flexible, realistic, and willing to keep an ongoing dialogue with your real estate agent in order to come up with the optimal price with little headaches.