Here is a Home Pricing FAQ I thought might come in handy.
Frequently Asked Questions When Pricing Your Home
I want to price the home high, since I can always come down later.
Many homeowners want to price their homes above market value in order to ‘leave room’ for negotiating. However, this strategy usually backfires. Most home buyers won’t even bother looking at homes that are overpriced which results in fewer showings. Fewer showings means fewer offers. A better strategy is to price your home at or slightly below market, in order to generate more offers and get the highest possible price.
What is Market Value?
Market Value is the price that similar homes in your market area have SOLD for.
I’ll price it higher, but I’ll consider all offers.
It’s good that you are willing to consider offers. But again, most buyers won’t even bother looking at homes that are overpriced, let alone make an offer. Unfortunately, most buyers believe that sellers who overprice their home are unrealistic and will be difficult to work with and will likely be a waste of time. This belief halts the stream of offers. Remember, the average buyer is looking at 15-20 homes at the same time they are considering yours. Sellers who price their home too high aren’t taken seriously by prospects or agents. Buyers would rather negotiate on a home that’s priced at market value.
Many home in my neighborhood are priced the same as mine.
Don’t get confused by looking at what other homes are currently listed for. Many sellers overprice their homes. Market Value should be based on homes that have already sold and closed.
I live in a newer subdivision where homes are still being built.
This means you will not only be competing against other resale homes, but also against the builder. To compete, you will want to price your home at below what the builder will charge to build the same home. When given the choice, buyers almost always prefer new. You can compete by offering a more competitive price.
My home has more features and benefits than the other homes, so shouldn’t I pricing it higher?
Unless these features and benefits are major, ie, a pool, guest house, kitchen/bath remodel etc., your market price will not ferret out any higher than homes that do not have these upgraded features and benefits. This is hard for most sellers to understand. Many sellers believe that because they have upgraded flooring, lighting, crown molding, paint, etc, they should price their home higher. However, if you upgrade your home for your personal benefit and then choose to pass these costs on to the buyer, you may be surprised with the response. When given the choice, buyers usually prefer a lower price in lieu of upgrades which they didn’t choose, but are being ‘charged’ for.