Selling Your Home: Pricing Strategies That Work
Pricing your home correctly is one of the most important decisions you’ll make when selling. Price it too high and it sits on the market. Price it too low and you leave money on the table. Here’s how to find the sweet spot.
Why Pricing Matters
Homes priced correctly sell faster and often for more money than overpriced properties. The first few weeks on the market are critical—homes that sit too long become “stale” and may eventually sell for less than they would have with the right initial price.
How to Determine the Right Price
1. Comparative Market Analysis (CMA)
Your agent will provide a CMA comparing your home to similar properties that have recently sold, are currently on the market, or were listed but didn’t sell. This gives you a data-driven starting point for pricing.
2. Consider Market Conditions
In a seller’s market with low inventory, you might price slightly higher. In a buyer’s market with lots of competition, you might need to be more aggressive. Your agent understands current market dynamics.
3. Factor in Your Home’s Condition
Be honest about your home’s condition. If it needs updates or repairs, price accordingly. Buyers will notice, and overpricing will just delay the sale.
Common Pricing Strategies
Price at Market Value
This is the most common approach. Price your home at or slightly below comparable sales to attract multiple offers and create competition. This strategy works well in most markets.
Price Slightly Above Market
If your home is significantly better than comparables or in a hot market, you might price 2-5% above. Be prepared to negotiate, and don’t overprice too much or you’ll scare away buyers.
Price Below Market (Quick Sale)
Pricing 5-10% below market can create a bidding war and result in multiple offers above asking price. This works best in competitive markets with motivated buyers.
Pricing Mistakes to Avoid
- Emotional Pricing: Don’t price based on what you need or what you’ve invested—price based on market value
- Ignoring Market Trends: Markets change—what your neighbor got six months ago might not apply today
- Overpricing “To Leave Room”: Buyers are smart—they know market value and won’t overpay
- Not Adjusting: If your home sits for weeks without showings, the price is likely too high
When to Adjust Your Price
If after 2-3 weeks you’re not getting showings, or if you’re getting showings but no offers, consider a price reduction. Your agent can help you determine the right adjustment based on feedback and market activity.
Understanding Price Per Square Foot
While price per square foot is a useful metric, it’s not the only factor. Location, condition, lot size, and features all affect value. Don’t rely solely on this number.
Working with Your Agent
A good agent will provide data and guidance, but the final pricing decision is yours. Trust their expertise, but also trust your gut. If multiple agents suggest similar prices, that’s a strong signal.
The Bottom Line
Pricing is both art and science. Use data to inform your decision, but also consider your timeline, market conditions, and goals. The right price attracts buyers, creates competition, and helps you achieve your selling objectives.
Remember, the market will tell you if your price is right. If you’re getting lots of interest and offers, you priced it well. If not, be ready to adjust.