You have a lot of decisions to make when selling your home, but none is more critical than your listing price. Pitch it too low and you leave money on the table; pitch it too high and you’ll struggle to attract buyers.
How can you find that “sweet spot” that makes both you and buyers happy? Take heed of these tips:
Know the numbers
Personal attachment can make objectively putting a price on your home a challenge. But where emotions can cloud judgment, hard numbers can provide clarity. Ask your real estate agent to prepare a comparative marketing analysis (“comps”), which compiles the sales prices of recently sold properties comparable to yours. The properties in the comps should be at most half a mile from your home, roughly the same age, and sold within the last three months. Comps will give you a highly accurate measure of the average home price in Dublin, CA, which can serve as your baseline for determining your house’s listing price.
Do some detective work
Found a property that’s almost identical to yours? Consider posing as a buyer and asking for a showing. This exercise allows you to not just scope out the competition, but to also see their selling strategy first hand. Take note of your first impression of the property, including your likes and dislikes. Pay attention as well to how they market the house and which features or upgrades they highlight. Most importantly, ask yourself whether you would pay the owner’s asking price. Putting yourself in the buyer’s shoes can provide valuable insight into how accurate your planned listing price is.
Factor in upgrades
If you’ve undertaken home renovations in recent years, don’t forget to factor them into your listing price. However, do note that certain upgrades yield a better return on interest (ROI) than others. Generally speaking, practical renovations like a kitchen remodel or a finished basement add more value compared to more leisurely upgrades like an in-ground pool. Are you planning on doing renovations but aren’t sure which ones to go with? Check the comps again to see what upgrades the sold properties came with and use those as a starting point.
Anticipate buyer behavior
To successfully reel in a buyer, you have to think like a buyer—including how they react to listing prices. Try to avoid round numbers as much as possible; instead of pricing a property at $400,000, list it at $399,000. Despite being just $1,000 lower, the latter price seems more affordable since it doesn’t cross the $400,000 threshold. Likewise, you should also play into the pricing ranges found in online listing platforms. For instance, if a platform has a price band of $350,000 – $400,000 but your property is listed at $405,000, it will be excluded from search results.
Consider market factors
As you may have already guessed, home prices are determined by both the property itself and the market at large. When settling on a listing price, make sure to factor in real estate trends in your area as well. If there are plenty of homes for sale in the neighborhood, you may want to lower your price a bit to attract more buyers. If demand outstrips supply, however, you can confidently raise your asking price. You should consider the season, too. House hunting is usually most active in the spring when the weather is more pleasant and when school is out. But if you absolutely must sell your home in the height of summer, consider lowering your listing price to incentivize people to brave the heat.
Don’t be afraid to adjust the price
If you find that no buyers are biting, recalibrate and apply the appropriate markdown. Don’t worry, about 60% of sellers tweak their original pricing at least once. The key is to recognize early that your property is overpriced so that it doesn’t linger on the market. Avoid making little price tweaks over time, however, as buyers might see it as a sign of desperation (no one wants to buy a distressed property). Instead, do one major price correction and see how buyers respond.
Pricing a home is truly a delicate balancing act. If you need expert advice on determining the best listing price, allow the Sousou Team to be of service. From helping you determine the average home price in Danville, CA to arriving at a winning asking price, we’ll be there every step of the way.