Thinking of selling your home? In addition to readying your property for staging, photography, and viewings, one of the most important elements of prepping your home for the market is determining its listing price.
There are two predominant pricing strategies when listing your home: price at market value or price below market value. Here’s how to price in each, as well as general concepts regarding the exact figure.
Related Read: The 5 Stages of Buying a Home
1. Pricing at market value
Traditionally, homes are listed at their market value, cognizant of current trends in pricing. To determine its market value, your listing agent will compare your home’s features to similar properties in your area, as well as recent real estate sales in your neighbourhood.
In a sellers’ market, demand for your home should be higher than in a buyers’ market, but you still want to price on-trend. If you price too high, buyers could be turned off and may look elsewhere – and you don’t want to scare buyers off, even in the most promising market.
Tip: If your home is the best on the block—a brand-new home after tearing down the old structure, for example—you’ll be looking to set a new benchmark for the area, meaning that price could be well above the others in the neighbourhood. This means you will want to list at the number you are looking to achieve, since buyers may not come to this number on their own. This is the same if your home is very unique or there are no comparables in the area. In these situations, listing at your target price will usually lead to better outcomes.
Wondering what homes are selling for in your area? Check out Zoocasa’s sold data:
2. Pricing below market value
There are a few circumstances in which you should list your home below market value. First of all, in a buyers’ market, you may be eager to sell your home and you may not get interest in the property if the price is not attractive. A lower price can attract buyers that may not consider your home otherwise.
If you need to sell your home quickly for any reason—you’re separating from your spouse, you’ve already bought another home and need to sell, or you’re moving a great distance—listing below market will usually spark interest from multiple buyers
There’s also the pricing strategy of listing low in an attempt to drum up multiple offers. If you price your home lower than your expected target in a sellers’ market, for example, you could excite buyers, hopefully getting more than one offer, pushing the sale price higher. But be careful! This can easily backfire if there’s not enough interest, and you don’t want to end up with no offers and the need to readjust your price point.
Numbers make a difference
The actual amount you choose can affect how people view your listing price.
Don’t choose an atypical asking price
Prices that aren’t typical can draw negative attention. If you’re thinking between $500,000 and $550,000, don’t choose $522,566. It draws attention to itself and to the seller, when the buyer should only be focusing on the home. Busy digits like this should be avoided.
Choose a searchable price
Think about when you search for homes online: if you choose a minimum and maximum price, do you choose round numbers or odd numbers? If you keep these round numbers in mind when deciding on a pricing strategy, your home will be found more often in searches.
For example, $499,900 will only be found by people searching for homes up to $500,000; and pricing at $510,000 will exclude anyone looking up to $500,000. Consider choosing an in-between list price, like $500,000, which would turn up in searches of up to $500,000, as well as $500,000–$600,000.
There’s no easy answer in pricing, so just keep your home’s market value at the forefront, and think of searchability and psychology to finalize your price.
Get even more home selling tips: Check out the Zoocasa Sellers’ Guide!