The floors are polished, the personal knick-knacks are put away and the walls are sporting a fresh coat of neutral-colored paint; you’re ready to put your home on the market. But how should you price it? Pricing correctly from the outset is of the upmost importance when selling a home. Statistics show that if a property is priced right, you’ll receive an offer within the first 12 showings, and the most buyers will generally visit your property early in the game. You’ll want to take advantage of all that buzz.
A good real estate agent can be a fantastic resource for targeting the right list price, but even if you’re working with an agent you trust, you’ll need to understand their methodology. Here it is in three simple steps.
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Be Aggressive
Pricing a property competitively from the outset ensures the property will sell in the shortest amount of time possible. Most buyer activity occurs during the first few weeks on the market. Pricing too high in the beginning causes a property to sit on the market for a longer period of time, and buyers will start to assume there’s something wrong with it. On the other hand, pricing just at market value – or even a little below – should incite a lot of viewings and, hopefully, multiple offers. Multiple offers create the possibility for the sale price to exceed the asking price; this often happens in a strong market.
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Know the “comps”
Look at what’s recently sold in the same area or building as your property. If a similar house or apartment has sold in the past few months, the price it sold for gives a strong indicator of market value. Streeteasy.com and propertyshark.com are good resources for checking out recent sale prices. If you’re working with a real estate agent, they should also be able to provide you with exact sale prices, days on market, etc., for comparable sales.
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Factor in the current market situation
After you’ve checked out the recently sold comps, you’ll need to take a look at the current market situation. (Again, streeteasy.com and/or your real estate agent can help here.) What else is on the market right now that’s similar to what you’re selling? If you’re selling a two bedroom apartment, for example, and there’s already one on the market in your building, you don’t want to be priced too far above where they are unless you have a legitimate reason. If your apartment has a fully renovated kitchen and bath and the one down the hall doesn’t, you have a case for a higher price, but perspective buyers will need to be able to easily and clearly identify the added value.