How to Set a List Price for Your Home
Pricing a home isn’t a “set-and-forget” procedure. It is an ongoing discussion between you and your agent. A lot of factors can come into play when selling a home, and not all of them can be anticipated. There’s a fair amount of psychology and strategy that goes into determining a home’s asking price. If you and your agent are on the same page about a marketing strategy, your home’s listing price shouldn’t come as a surprise.
The Comparative Market Analysis (CMA)
One step in setting the appropriate list price for your Raleigh Home is acquiring your Spencer Property Comparative Market Analysis (CMA). The purpose of the CMA is to price the property appropriately to maximize market response and the final sales price. Your real estate agent’s CMA attempts to estimate today’s fair market value by an honest assessment of the following:
- general area and specific location within the neighborhood
- property characteristics (number of bedrooms, baths, size, age, views, etc.)
- features and amenities
- condition of your home
- comparable sales
- market conditions (current and projected)
Finding the Balance Between Too High and Too Low
Just like shopping for a pair of new shoes, a new cellular phone, or a new vehicle, most buyers shop by comparison. That is, they preview homes online and offline, in the price range they can afford. It is critically important that you consider this when setting a list price for your Raleigh home.
If you set your price too high, many potential buyers we elect not to look at it at all, while others will simply walk away without making an offer. Furthermore, overpricing actually helps sell competitive listings—which stand out as good values in comparison. Well-priced homes create a sense of urgency in the buyer/broker communities to act quickly with strong, clean offers, and help to produce the competitive bidding situations that generate the highest sales prices.
If you price too low, you’ll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.
Consider the Online Search and the Buyer’s Price Range
Today, a big part of selling your Raleigh home is making a great impression online. Nearly all home searches begin on a smartphone or tablet, so the right pricing strategy plays a big part in scoring the best offer on your home.
Don’t get too creative with you asking price. Suppose you found a listing with an asking price of $457,333. It would probably grab your attention and for all the wrong reasons. The goal is to showcase the property, not the seller, and to appeal to as wide an audience as possible. Getting quirky with your asking price counteracts this tried-and-true strategy.
In real estate, the “99” strategy is often employed. An asking price of $399K, time after time, will draw in more buyers than an asking price of $400K. That’s not to say that there’s no room for prices between $399K and $499K, but a slightly lower price, only $1,000 lower than the nice round number ($324K vs. $325K) can help buyers find you when they’re searching within a specific price range. You don’t want to miss a large segment of potential buyers.