Real Estate Markets Are Changing Again, So How To Price Your Home?

Great news, most areas are seeing home price increases.  How should a typical homeowner set the price to take advantage of the current market? 

In our office last week we listed 5 properties.  Four are under contract and one is still available.  Let’s examine the four sales.  Three homes sold close to asking price.  These properties were priced competitively and the local market responded to a bump in prices from previous sales.  The fourth property was priced slightly under the current market.  This sale had multiple offers and sold about 8% above the listing price. 

Pricing is still everything!  The one property that is still active, what went wrong? 

The owners wanted to price the property about 7% above recent sales.  The market so far is clearing telling us that the property is priced outside of the current pricing limits and needs a price adjustment.  Again, what is the best way to price your home in the current market?

In today’s real estate climate the best starting point is for you and your agent to review the recent closed sales.  This should provide a close grouping of properties having a similar value range.  If your local market it showing appreciation it is advisable to lead your market and stretch the current values.  This must be analyzed carefully so as not to outpace your market and have your home languish on the market.  The longer your home is on the market, you can typically expect to receive lower and lower initial offers. 

Also review the pending sales for your market.  This will be an excellent way to gauge current days on the market.  Be careful not to price yourself too high.  You will know very soon if this is the case.  If recent pending comparables are selling in 10 – 30 days and your home is on the market for 45, it is almost always the price.  This does assume your home is on the correct MLS (multiple listing service), has multiple photos and is easy to show.  It is best to listen to your local Realtor®.  Your  agent will get feedback from prospective purchasers who have seen your home and have a good understanding of current values.  Overpricing your home in any market is the quickest way to get LESS for your home not MORE.

What happened with the one home that had multiple offers and achieved a sales price about 8% above listing price?  This is risky but I have seen this tact work more often than not.  By undercutting the market, it draws in a much larger buying pool which simply bids up the price of your home typically higher than if you had reasonably priced your home.  This pricing strategy usually works best when there is a shortage of inventory in this immediate market and your home shows very well.  This is a strategy that must be handled with care and with a proper analysis of your market is essential.  It can also backfire so be careful and do your due diligence with you Realtor®.

Pricing your home in an appreciating market is just as important as the declining market we all experienced for a number of years.  Do your research with your Realtor®, price aggressively (if warranted) and you will hopefully have a quick and rewarding sale of your home!      

Suburban Realty Professionals  ♦  Princeton Office  ♦  96 Wall Street  ♦  Princeton, NJ 08540  ♦  877-221-8787