Showings per listing are higher than they’ve been at any point during the past ten years. It’s hard to get in and see homes because we have just a one month supply. In other words, if no new homes came on the market, all the homes for sale now would sell in one month.
If you’re thinking of selling a home in a market like this, how do you approach pricing? Our experience has been that it’s hard to underprice a home and still easy to overprice a home.
The ideal asking price is one that brings as much interest as possible and encourages buyers to make competitive, higher-priced offers. You can’t price a $650,000 home at $10,000 and hope the market pays what the home is worth. People will see the low price and ignore the property because they’ll think something is wrong with it.
You can create interest, though, when you price a home slightly under what you think its real value is. If this sounds terrifying, remember that pricing is part of a strategy. Where you start isn’t always where you plan to finish.
Think about value. If buyers see your home as a good value, they’ll look at it. Buyers considering homes in your area and price range are looking at every single one that comes on the market. If your property is prepared well – it looks great and shows well – and is priced competitively, people will rush to see it and submit bids higher than the asking price. We’re also seeing buyers sweeten their bids with offers like free rent-backs for sellers and appraisal gap coverage whenever a home is competitively priced.
Pricing your home slightly below what you hope to get when you sell it can work in today’s market. If conditions change and prices start to rise more slowly, or many more homes start to come on the market, this will likely change. Of course, if setting an asking price slightly lower than what you hope to earn seems a little risky, you can always ask for market value.
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Thinking of selling soon? Questions about pricing? Schedule a call to talk about strategy in this market.