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Are you wondering how to price your home before it goes on the market? While improving the appearance of your home — sprucing up the lawn, decluttering your home, or updating lighting fixtures — is an important factor to consider in attracting higher offers, there are pricing strategies that don’t involve any physical labor.
Here are some tips on how to price your home to attract top-dollar offers:
Price your home competitively.
Setting the right price for your home is the single most important decision you will make when deciding to sell. Go too high, and you risk turning off every buyer in the marketplace, go too low, and you leave money on the table. One simple but powerful technique for pricing your home is to spend time looking at comparable homes. By doing so, you will be seeing the world through a buyers’ eyes and gain a better understanding of what a reasonable listing price looks like.
Be brutally honest with yourself. Compared to the competition, what price would position your home as the best value proposition for buyers in your marketplace? The best listing price could be anywhere between “too high” and “too low” depending on the local market and time of year. This is when having an experienced agent who knows the market and how buyers respond comes in handy.
Use strategic price points.
A home buyer’s target price range is typically raised or stretched incrementally, and this allows for an easy way to get more out of a home offer. Just like you might be more compelled to buy a gallon of milk at the grocery store for $4.99 rather than $5.00, think about how you can get the most out of an offer at a specific price point. Similarly, if you’re listing your home at a specific price, like $227,900 dollars, you’re not going to attract the highest offer in that price range.
Since home buyers tend to consider homes between price ranges that are separated by five to ten thousand dollar increments, consider setting your price near one of these natural price points. For instance, a price $229,900 would probably net you exactly the same number of buyer inquiries as a price of $227,900, but moving your home down to $224,900 (the next price point down) would widen your potential buyer pool.
Consider value range marketing.
Another pricing technique that may be the ticket to more showings and higher offers is to use value range marketing. Value range marketing is a pricing technique in which you choose a listing price based on what you would sell for today if a buyer wrote you a check. You then choose another lower price — one that you wouldn’t reject if offered, but would use as a starting point negotiate towards some middle ground. So instead of listing your home at a specific price of $496,000 dollars, consider listing the home between $459,000 and $496,000.
Hire an experienced listing agent.
Not all listing agents are created equal. An agent who knows your local market and what comparable homes have sold for recently, will know your home’s potential. To find an experienced real estate agent, take the time to research local real estate agent, talk to friends and colleagues about who they recommend, and interview multiple agents before making a hiring decision. In addition, be sure to come to an agreement about a specific, documented marketing plan before signing a long-term listing agreement with your agent.
Encourage two-way critiques.
Successful sellers aren’t afraid of a little (or a lot) of constructive criticism. In fact, they invite agents to give them helpful suggestions on everything, from pricing to curb appeal, to help them secure the highest possible price for their home. On the flip side, when hiring an agent, be sure to find an agent who is open to suggestions and review his or her marketing plan for your home. For instance, as a seller, you may find ways to improve advertising copy, flyers, photographs, or even virtual tours.
Offer incentives & prepaids.
A buyer who has narrowed their search down to two or three top choices may need a little push to motivate them to take action. To encourage buyers, many sellers offer incentives like buying the interest rate down on the purchaser’s loan, paying for closing costs, inspections, or repairs, or providing allowances or credits for home upgrades after closing. In addition, many sellers prepay for services like internet services for a year, taxes or homeowners association dues, or even golf club memberships.
Use a pre-appraisal and pre-inspections.
A pre-appraisal is an appraisal of the home before a buyer has made an offer. By having this done early you will have an objective voice that has provided a value for the property independent of your own opinion and could be a great tool in talking with buyers. In addition, many sellers do pre-inspections of the home to provide buyers with a clear whole home inspection or pest and dry rot inspection. (A word of caution: anything discovered during a pre-inspection will likely need to be disclosed whether you fix the issue or not).
Learn to fail fast.
If something isn’t working, successful sellers have the strength to fail fast by making adjustments to their strategy quickly. For instance, if after implementing your marketing plan, buyers don’t begin to view your home on a regular basis, this is a clear indication that the market is rejecting your price. There is only one solution: lower your price. On the other hand, if you have a steady stream of buyers touring your listing, yet you aren’t receiving any offers, this is often a symptom of buyers rejecting, not the price, but the home itself. Something about the home is turning them off. Savvy sellers attempt to identify the problem and take proactive action to correct it.