Embedded Files
TLDR: Getting the list price right is the key to selling your property.
TLDR: Getting the list price right is the key to selling your property.
At what price should I list my property?
At what price should I list my property?
Figuring out the right answer to this question will determine whether your property will sell quickly (or at all) more than anything else you can do to your property. Hitting the listing price sweet spot is much more involved than simply deciding on a number that reflects how much you'd like to net at closing. The biggest mistake a seller can make is to overprice their home, so be sure to research what similar properties are selling for in order to get your property sold!
Example
Example
Buyers are comparing what's on the market. If you think your property is worth $250,000 but a near-identical property a few doors down hits the market for $230,000, which property do you think will sell? It's for this reason that you'll need to research what properties are actually selling for (which is not the same as what they're listed for), what's available in your local area, and know whether it's a buyer's or seller's market.
Research Comps and Get to Know Your Market
Research Comps and Get to Know Your Market
When researching properties that have sold in your area (or comparables–"comps" as they're known in the industry) in order to decide on a list price, try to find properties as near as possible and that closely resemble the property. If the home you're selling is a 3 bedroom, 2 bathroom (3B2B) single family home, you should be looking for similar properties to see what those are selling for in the area. If you are researching properties that are 2 bedroom, 1 bathroom townhomes, you're not going to find accurate market information for your 3B2B property.
Here are some helpful questions to ask when researching your market:
What have properties with similar bedrooms, baths, and square footages sold for recently?
How quickly are properties selling?
(DOM is short for Days on Market)
Are they typically selling at, above, or below the seller's asking price?
What is available on the market?
Occasionally you may experience some difficulty locating exact replicas of the number of beds/baths that you're seeking in the immediate vicinity, or maybe your property has an unusual number of baths–like 3.5 (that means three full bathrooms and a half bathroom). If that is the case, you have a few options: widen the search criteria both by increasing the location search and by finding similar, but not exact matches, of property qualifications.
Because offers tend to be below the eventual sales price, we'd recommend pricing your property at slightly more than what you anticipate it actually selling at. When we say slightly, we mean $5,000-10,000 above what you’d like to get. Any more and you may deter buyers from looking at your house at all, which will result in your house not selling.
Tip: Phone a Friend
Tip: Phone a Friend
Before you decide on a listing price, call a friend, neighbor, or family member to independently research what your home might be worth (Don’t compare answers until they’ve researched, and don’t get upset if their number is lower than yours!). As sellers, we tend to (understandably) be emotionally attached to our home, which can result in a bias when pricing your house, resulting in difficulty selling. Having a second set of unbiased eyes review comps can help you decide on an asking price that will get your house sold.
What if I price the house too high?
What if I price the house too high?
The telltale sign of a property that is priced too high is a lack of traffic and/or offers. If you do receive an offer, expect it to be significantly lower than what you're asking.
If you do happen to get an offer, you may hit a snag in the transaction if the buyer needs an appraisal by their lender or includes an appraisal contingency. The appraiser, a neutral third party, assesses the value of your property compared to what other properties are selling for in the area to determine whether your property is, in fact, worth what the buyer has offered to pay.
“I’ve had open houses and many people have walked through, but my house still isn’t selling. What gives?”
“I’ve had open houses and many people have walked through, but my house still isn’t selling. What gives?”
It sounds like you’re marketing it appropriately, and while your property is priced in the right ballpark because you’re getting foot traffic, your property is still overpriced. At some price, your property will sell.
Storytime
Storytime
“A seller in Baltimore, whose house was in terrible condition and wanted it listed at twice what it likely would have sold for, once told me that Michael Phelps purchased a property in Baltimore and he was going to wait until someone rich like that came along to buy his house. Don't be that seller. Be reasonable in what you're asking and your house will sell.”
What can I do if I haven't received any offers?
What can I do if I haven't received any offers?
If you've already listed your property on multiple websites and hosted a number of open houses (whether successful or unsuccessful), you should lower the asking price. The general rule is this: if two weeks go by OR you have ten showings OR you have ten people walk through an open house and you still have no offers, your property is priced too high. You can also think of it this way: At some price between what you’re asking and $0, your house will sell. The telltale sign of a property that is priced too high is a lack of traffic and/or offers. If you do receive an offer, it'll likely be significantly lower than what you're asking.
Tip: Find a Creative Solution
Tip: Find a Creative Solution
If your home isn't selling, you can get creative. If the buyers who walk through are offering feedback on how they dislike the style of the master bathroom, offer a $5,000 credit to redo the master bathroom. While reducing the price by $5,000 would effectively net you the same amount as offering a $5,000 credit for repairs or improvements, it may lure buyers who wouldn't otherwise have the cash to redo a bathroom after closing.
Page updated
Report abuse