Pricing your home correctly: its benefits and why it matters
“How much is my home worth?”
That’s the first question that comes to a homeowner’s mind when it’s time to sell.
Pricing your home correctly is one of the main factors that determine how fast and how much money it will sell for. Like everything else in life, determining the right price for your home is a balancing act. Of course, homeowners always want to push for a higher amount and get top dollar. However, this should not be overdone as it may turn away potential buyers.
Across Charleston, residential property values are on the rise. Looking at national statistics, The S&P CoreLogic Case-Shiller national home price index reported an increase of 6.2% in November 2018. In fact, the national housing index has seen gains of 5% or more over the previous year for the past 16 months.
Real Estate Industry experts foresee a steady rise in home prices in the next 5 years. This is excellent news for Charleston homeowners who plan to sell. Unfortunately, such forecasts result in the seller’s over inflated expectations, including overpricing. This can negatively impact the sale, no matter how big the current buyer pool is and how hot the seller’s market is.
Never take for granted the importance of pricing your home correctly. If you’re overpricing your home in the hopes of building a negotiation buffer, you are awfully mistaken. This is not recommended as you may lose listing views and prospective buyer showings.
So, what is the Right Price?
The right price is one that is in tune with how much similar homes in Charleston are being sold for. You don’t want to undervalue and cheat yourself with a price that’s lower than your home’s worth. If you’re working with a real estate agent, he or she can help you evaluate the market. Moreover, your agent can help you resist the urge to overprice or underprice your home.
Think like a buyer. The dangers of overpricing your home will start to creep in if your eagerness to sell gets the best of you. What are the things that you value in a home? Is it a spacious yard? A state-of-the-art kitchen or an updated view? These are likely the same things that your buyer values as well. These will be good starting points in pricing your home for sale.
The acronym is PIRTFT. It stands for Price It Right The First Time. When you price your home correctly from the start, you will attract more potential buyers. If you offer your home for a fair price, one that’s similar to comparable Charleston values, the buyer will feel better about the deal.
Basis of Pricing your Home
NEVER price your home based on the following:
- Your house’s construction cost
- The funds needed for you to buy a new home
- Your mortgage cost
- What your bestie tell you
Fair pricing can be achieved by basing it from recent comparable sales of similar properties in the Charleston area. It’s very easy to fall into the trap of overpricing with the hopes of benefitting from a higher selling price. Some sellers tend to underprice for fear of not being able to sell quickly.
Here’s what you need to keep in mind. Overpricing can cost you even more than underpricing. If you set your price too high, you are only helping your competitors to sell their homes. It is a thankless job with zero commission.
How will you Know if Your Home is Overpriced?
If a few folks have viewed your home and you still didn’t get any offers, then you might be pricing your home too high. There is obviously a problem and usually, it is the price. Overpriced houses stay longer on the market. The longer it stays there, the more suspicious the buyer gets regarding its real condition. There’s a huge chance that the transaction will result in a lower final sale price.
A property that is priced fairly will sell within eight to ten weeks of its listing date. This is possible even in a slow market. On top of being a tough sell, overpriced homes might go through several price cuts. The longer it remains unsold, the more you have to drop the price below market value to close the deal later on.
Pricing your home right will prevent you from making small price cuts over time. This gloomy scenario is emotionally draining on the homeowner’s part. Both agents and buyers will see the listing as stale and interest will die down. Eventually, the homeowner will have to lose a considerable amount of money to generate interest again.
Here are the top benefits of pricing your home correctly:
1) Faster Sale
Homes that are priced to sell will gain exposure to more prospects who can afford its price. Sellers who overprice are looking for that one buyer who can afford the home. Unfortunately, these sellers just keep on discouraging buyers who could have afforded the home.
2) It will attract Higher Offers
Pricing your home to sell will lessen the possibility of getting “low ball offers”. Buyers fear they might lose out on a valuable Charleston property when the home is priced right. Fairly priced homes have better chances of getting multiple offers too!
3) Gain Buyer Confidence
You don’t want to price a home too high, but you don’t want to go too low, either. If you do that, a potential buyer may wonder if something is wrong with your property. Worse, they might think you’re concealing something.
Selling your home for a fair price, shows the buyer that you and your real estate agent have done the pricing homework. A fair price also means you have checked around the house and made sure all the necessary maintenance work has been done prior to staging.
According to a study done by Keller Williams Realty International, homes that required 1 or more price reductions sold for less money than homes that required no price reductions! For example, homes that required 3 price reductions sold for 88% of the original list price and took, on average, 146 days to sell. Homes that required no price reductions sold for 99% of their original list price and took, on average, 40 days to sell.
What’s the conclusion? Sell quickly by fairly pricing your home from the start. This ensures it will sell in the shortest time possible and for the best possible price. Sounds great? Let’s get to work!
Matt O'Neill Real Estate is here to help you sell your Charleston area home for the highest possible price!
We consistently sell homes in the Charleston area faster and for more money because we know how to price our listings the right way. Our honest and accurate approach to pricing Charleston homes provides our clients with a solid understanding of what their property is truly worth in the market.
We have a team of experts who have provided values for hundreds of properties in our area using the most accurate and relevant data, so you can feel confident in our home value opinions.
We offer no-obligation home valuations, so you find out your home’s current value even if you don’t plan on selling it right now. Click here to get started.