How do you sell your home in record time? Can you guess the answer? I’ll give you a clue – it’s a three-word answer. Price it right! And the next three words are – from the start. Price it right from the start! Are marketing, advertising and signage important? Yes, and all of those elements come in to play when selling a home. But it really comes down to one bottom-line factor – the price.
Pricing your home right from the start may be easier said than done, but it’s important to do if you want to sell your home quickly. As a seller, you probably have certain ideas about what your home is worth and the price you “need” to get. I’ve always addressed this in my Comparative Marketing Analysis (CMA) and listing presentation. The seller determines the asking price, but the market determines the selling price. It all comes down to what the market will bear, or in other words, what a buyer is willing to pay for the home.
And so, if you paid $600,000 for your home, and you put another $50,000 into renovating it, but the market is not as strong now as it was when you purchased the home, you may very well lose money on the sale of your house (i.e., you may not get back your renovation costs and/or you may get less than what you originally paid for the house). This can be disheartening, to say the least, as you approach the home-selling process.
Thankfully the market usually gives you strong signs about how your home is priced. If you have multiple first and second showings during the first week on the market, then you have priced the house appropriately, and your house should sell quickly. If you have several first showings but don’t have any second showings, then you are priced a bit too high. And if you don’t have any showings that first week, then you have missed the mark.
This is the general rule of thumb, but sometimes there are exceptions to the rule. For example, the high-end of a given market tends not to have as much activity mostly because the buyer pool is limited at those high price points. It may also depend on the time of the year. The holiday season (starting right before Thanksgiving and going into the New Year) is typically the slowest time of the year, and summer is often less busy as well. And so if you put your house on the market in the middle of December, it could be slow just because of the timing. But besides these few exceptions, the market generally tells you how you are priced right off the bat.
There is an interesting phenomenon with regard to pricing, which is if you overprice your home when it first goes on the market, you usually get less for the house in the long run. I know this seems almost counterintuitive, and it may not completely make sense, but it’s the truth. Sellers often want to leave themselves “negotiating room” so they overprice their houses to give themselves a cushion. Time and again, I see those sellers ultimately getting less for their homes than if they had just priced it right from the onset.
The other thing to keep in mind is that when you price your home correctly right out of the gate, a bidding war may ensue. This is a win-win scenario for you as the seller because this kind of competitive situation usually results in the bidding up of the price of the house. Good news!
In essence, to sell your home in record time, here are some tips to keep in mind:
- Price your home right from the start based on the current market situation and the comparatives (the homes that have sold in the last six months). Your real estate agent will share all of this information with you in his/her Comparative Marketing Analysis and listing presentation. Don’t overprice your home to give yourself “negotiating room.”
- Keep in mind that you do not determine what the selling price will be, the market does. And unfortunately, the price that you feel you “need” to get may not be the price that the market will bear.
- Make any price adjustment as quickly as you can if you have indeed mispriced your home. The activity on a home new to the market is greatest during the first two-three weeks when the most serious buyers come through the house, thus making it the ideal time to capture your buyer!
What are your thoughts on selling your home in record time? Have you found yourself in this situation? If so, how did you decide to price your home? Did you use some of the pricing tips/recommendations detailed above? If so, were they effective? I can’t wait to hear.
