Pricing your property is a balancing act:
On the one hand, you want to set a listing price that maximizes interest among qualified, motivated buyers who will be willing to pay top dollar for your property. Indeed, such buyers will ultimately determine your property's top market value.
On the other hand, you do not want to set a listing price that attracts a lot of buyer prospects, but sets the stage for negotiations that result in your getting less than what your property is really worth.
Your Home's Actual Market Value
In a perfect world, your home's value would be everything you think and need it to be. However, simply put, your home's value is not determined by you, but by what the market is willing to pay for it at a given time. These days, the "market" is very scary for most buyers. They’re constantly battling not only a lot of competition but also higher interest rates that seems to be increasing more and more each day. Sellers will want to really make sure they’re house is priced accordingly so to attract as many buyers as possible
You can determine a value range for your home by looking at the recent sale prices and current asking prices of homes similar to yours in your area. Called a "Comparative Market Analysis" or (CMA) it includes a variety of "comparable" homes drawn from the local Multiple Listing Service (MLS).
The Bottom Line: REALISTIC IS STRATEGIC!
On average, serious buyers look at about fifteen properties before they make an offer. Doing so gives them a basis for determining how competitively a property is priced, both in terms of the market generally and what they are looking for specifically.
If you overprice your property you'll usually lose serious buyers even if they otherwise love it. Experience shows that buyers usually do not make what they consider to be realistic offers on overpriced properties because they assume that doing so will just be a waste of time. The overlap between buyer and seller price ranges is depicted below. It will be helpful to keep this diagram in mind when pricing your property.
How you price your home will directly impact upon how many buyers, showings and offers you attract, and ultimately to how easily it sells. At the pyramid's center is the fair market value at which a reasonable percentage of buyers would view and purchase your home. When you under price your home you'll attract a greater percentage of buyers, and when you overprice it you'll attract a lesser percentage of buyers.
Being Realistic IS Strategic!
What to consider when pricing your home to sell
Markets change fast, so it’s best to find comparable sales within the past three months. If you go back too far, you will see homes where a deal might have been made many months before it closed.
Real estate markets can turn on a dime, so a deal put together more than six months ago isn’t applicable. Pending sales are can be an indicator of the current market’s conditions. However, sold properties are more accurate numbers when determining what price to list your home at (including the condition of your property)
Related Links: Some pre-listing home updates for spring 2022