Pricing your home is an important step in the selling process, and it is one that should not be taken lightly. Sellers do not want to leave cash on the table if their home could command a higher value than the asking price. Yet, pricing too high could result in your home sitting unsold while other homes in the neighborhood are snapped up.
How to determine market value
Realtor.com notes that year-over-year home prices in Atlanta are up over 12%, and many sellers want to list their home at a higher price to take advantage of the improved market. Priced correctly, a home will sell quickly for its current market value. To help determine market value, consult a real estate professional, who will assist you by analyzing recent sales of comparable homes — known in the industry as comps. Real estate agents also assess your home and provide an impartial opinion to help validate comps.
The advantage of pricing on a round number
One important pricing technique used by real estate agents is pricing on a round number. Suppose your house is worth approximately $300,000. Consider what would happen if you priced it $10,000 higher, at $310,000. You may get the extra money in the form of a higher bid, or you may miss out on potentional buyers. You may want to price your home slightly lower and generate more foot traffic from buyers who have set $300,000 as their upper spending limit.
When buyers search the Internet, they tend to do so in terms of round numbers, such as $250,000 to $300,000 or $300,000 to $350,000. By sticking with the midpoint number of $300,000, you will ensure that your house will appear up in a greater number of online searches and attracts a wider range of potential buyers.
In addition to comps, sellers may want to look at days on the market for recent sales in their neighborhood. If higher-priced homes take much longer to sell and you are working under a tight time frame, you may want to consider a lower sales price. You may set an initial price point on the high end of the comp range but be willing to reduce your asking amount in a few weeks if you do not generate enough interest in your house. The time of year you are selling is also a factor. The market slows considerably in the winter months, and you may need to price lower if you want to get a deal done quickly.
Selling a house is rarely an overnight event, so be patient and be willing to try new strategies for pricing your home. By working with a real estate agent you trust, you will be comfortable with your asking price and ensure that your home is selling for the amount it is worth in today’s market.
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