Pricing your home is a big decision and one that should be considered very carefully. Because everyone shops on a budget potential buyers can either be turned away or pleasantly surprised by your home’s price. Follow these 4 tips when pricing your home.
1. Price your home for the local market.
Home prices are different in different areas. Housing markets are local. Comparables for similar houses in your area will give you an idea of the market. Look back as far as a year and find trends. Are prices going up or are they going down? If you’re using a real estate agent go over the comparables with them.
2. Ask about the market.
If you are using a real estate agent, don’t hesitate to ask them questions about the market. Ask them what the conditions are for your area, ask them about the competition and ask about trends; more specifically, what buyers are shopping for. The “absorption rate” is the best way to understand a current market. The absorption rate is the current conditions and inventory, and how long it will take the market to absorb (sell) all the currently listed properties.
3. Know what it’s worth.
Before you hire an agent talk to a few different prospects to find the one that can best represent your home. While you are interviewing agents ask each of them what price they would recommend listing your home at. This will give you more than one opinion to go on. Have your home professionally appraised. Add the comparables into the equation and you have a good idea of what your home is worth on today’s market.
4. Price your home strategically.
There are different ways to strategically price your home. Pricing your home according to research compiled from the market (such as comparable and agent recommendations) is known as market-oriented pricing. This is obviously very important, but you should also choose numbers wisely by using psychological pricing. We see this type of pricing everywhere, for example, products that are priced at $5.99 rather than $6.00. There’s not much of a price difference, but it sure does make a difference to buyers.
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