How to Price Your Home in a Competitive Market
In today’s market, where demand is outpacing supply in the Twin Cities area and many regions of the country, pricing a house is one of the biggest challenges real estate agents face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them.
Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this can negatively impact the sales price of the house.
Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range, usually in $25,000 increments. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!
One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching.
Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Let’s get together to discuss what is happening in the housing market and how it applies to your home.