Though we’re currently in a seller’s market, it’s still important to set the right price for your home if you want it to sell profitably — and quickly. Pricing to sell is one of the best things you can do before listing.
The U.S. Economic Outlook from the National Association of REALTORS® (NAR) shows that existing home prices in the U.S. are anticipated to rise by 4.5 percent in 2021. Experts project that home values will continue to increase throughout the year.
Realtor.com’s Chief Economist Danielle Hale confirms:
“We expect price gains to ease somewhat in 2021 and end 5.7 percent above 2020 levels, decelerating steadily through the spring and summer, and then gradually reaccelerating toward the end of the year.”
Why’s it so important to price your house right?
The goal of pricing your home to sell is to enhance visibility and attract more buyers. Rather than getting locked into a negotiation with a single homebuyer, you can price your home to maximize demand so that more buyers are looking.
The good news about housing inventory recently hitting an all-time low is that this puts sellers in the driver’s seat. Whenever there’s a supply shortage coupled with strong demand, you have a good opportunity to negotiate. This may give you more say-so over requested repairs, move-in date, and especially price.
In this seller’s market (seen below), you may be able to ask more from a potential buyer, especially if you receive multiple offers:
Since inventory is currently low and buyer demand is high, it may be tempting to list your home at the upper end of your price range. But keep in mind: A higher price doesn’t necessarily mean you’re going to rake in more cash. It may actually repel potential buyers.
Ready to sell? Here’s a local loan officer who can help.
Even with such limited inventory, it’s likely your home will sit on the market or eventually need a price reduction (a red flag for buyers) if you don’t price it right from the start.
This chart paints a clearer picture:
How can you make sure your home is priced to sell? Work with a skilled real estate agent. Pricing your home to sell from the beginning makes it less likely that you’ll find yourself negotiating with just one buyer. Multiple buyers may bid on your home instead — potentially driving up its sale price.
Every realtor’s strategy is unique, but your agent may use some or all of these home-pricing tactics:
- Determine your home’s proposed value via a complimentary CMA, or Comparative Market Analysis, provided in your listing presentation. This may be software-generated and can vary by agent.
- Compare the CMA collected from nearby properties (comps) to the value projected from an online valuation tool and adjust the listing price as needed.
- Ensure that all minor repairs and necessary updates have been made and that your home is clean and in showing-ready condition.
- Take into account the season, whether it’s a buyer’s or seller’s market (as it is now), and how quickly homes are selling to again adjust listing price.
- Set a final number that makes your listing stand out. Some agents steer clear of ending a home’s price with a zero (i.e., the $.99 discount appeal). Others say that including zeros (i.e., $300,000) helps to straddle two pricing brackets and optimize exposure.
The key? Make sure your home is priced to sell immediately (PTSI). This will help your home’s listing to be seen by the largest number of prospective buyers. Having more than one buyer interested in your home ensures that it’ll be sold at a more competitive price.
With a home priced right in today’s hot market, sellers can look forward to smooth sailing. Showings are up 63.5 percent compared to just a year ago. Meanwhile, housing inventory has dropped 43 percent from the year before. This makes bidding wars probable. If you sell right now, you can expect to receive three or more offers on your house.
How to close on your next dream home faster
It’s a great idea to prequalify now before you prepare to sell, and this is why. It gets you ready to buy. Once you sell your current house — which is bound to be quick, in today’s market — you’ll be likely to close even sooner on your new place. Visit LoanFly.com for details.
For educational purposes only. Please contact a qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.