Bob Barker’s famous game show The Price is Right, which is now hosted by comedian Drew Carey, correctly coins the phrase in the famous showcase showdown: “All yours if the price is right!” In real estate, this phrase echoes true for both buyers and sellers. Sellers, in particular, have the tall task of determining the best listing price for their hallowed home. Because emotion is a factor, as a seller you may understandably desire to list your house at an exaggerated price. After all, it is YOUR home and you know the love, care, and attention you’ve given it through the years. However, if the home is priced too high, it may scare off potential buyers and sit idle on the market for many months. Therefore, hiring an experienced Golden Bear Realty agent who knows your neighborhood and the current market value of your home is incredibly important. Before you sit down with your agent to discuss numbers, consider the following stratagems to successfully and swiftly sell your home.
Comparable Home Sales
In real estate jargon, this is known as “market comps.” Your real estate agent will be able to show you the data of recents sales on homes similar to yours in square footage, acreage, amenities, and location. Often, sellers will know the “list” price of a neighboring home, but the actual “sale” price might be considerably lower, or -- if you’re lucky -- considerably higher. Your real estate agent will collaborate the information on several homes to include list prices, sold prices, and current inventory. Using both past and present data on comparable homes will help you determine the correct price point.
On the game show, the final showcase is awarded to the contestant who gets closest to the actual price without going over. Similarly, in real estate, sellers “win” if they price the home at market value, not by overpricing the home and then playing the wait-and-see game. Mistakenly, sellers sometimes intentionally overprice their homes, knowing that they can decrease the price if it does not sell. This strategy is not effective as buyers (and quite honestly buyers’ agents) do not want work with difficult sellers. In many cases, sellers who price their home accurately and fairly find themselves with multiple offers. Then, serious buyers will likely pay more than asking price to secure the property.
Employ Psychological Pricing
Known as charm prices in marketing, using the numbers 99 or 95 at the end of your list price will psychologically make the home price appear more attractive. For example, instead of listing a home at $500,000, consider listing at $499,999 or $499,500. Since numbers are read left to right, buyers tend to focus more on the first number and consider it a better value. As an added bonus, pricing your home this way will allow your property to show up on more online searches. Frequently, buyers search for prices by range. For example, if a buyer searches for properties under “$500,000” your home will not be listed. However, if you list it as “$499,999” it will show up, thus increasing its online presence. Also, keep the list price clean. Do not scramble numbers. Listing a home for “$501,727” or some other odd combination has adverse effects. People appreciate clean numbers and easy calculations. Using a scrambled number confuses buyers and makes the negotiation process more challenging for all parties involved.
Engage in Candid Conversation
Remember, your real estate agent works for you. Therefore, be upfront and honest about your real estate needs and wants. If you decide to price the home higher than the agent recommends, be open to price adjustments and revisit the list price at the end of each month. If the home is not getting any showings from other agents, then price may very well be the deterring factor. During the selling process, other conditions such as market variances, timelines, and even climate changes can affect the price point. For example, neighborhoods that experience significant flooding after heavy rainfall or homes that have storm damage will cause the price to fluctuate slightly. While these cases are rare, sellers are encouraged to have some flexibility with the price.
While the pricing process may seem cumbersome, once you and your real estate agent have determined the proper price point, then you can casually sit back and watch all the buyers “come on down” your street!