Some of the most frequent statements realtors hear from sellers are “I need this amount to be able to sell,” or “I need this in order to buy another home.” Well, if you have ever sold a home, you know this is not the way to price it. The market will determine your price, and it’s important to get it right from the start. If you over-price your home, you will chase the market and ultimately get less.
Pricing is not an exact science. Start by looking at homes recently sold in your area that have similar characteristics as yours. You need at least two homes sales and one active listing when determining the asking price. Without previous sales, your home may get to contract but most likely not appraise for the asking price, and your sale can fall through unless you successfully renegotiate with the buyer. In a hot market like Westchester or Riverside, California, where many people get multiple all cash offers,
Always ask a prospective realtor how many homes they sold in the last year and how many years of experience they have. You should also check their reviews/references and ask for a list of sales. Always make sure they know the area; there are realtors offering discount commissions but who know very little about the area. But most important of all: Never hire a realtor just because they quote you the highest price for your home or lowest commission. Why? When you need a doctor, do you shop for the best price, or do you go by reputation and experience? In many cases, the realtor that gives you the highest price has one goal, and that’s to get your listing. If it doesn’t sell at that price, the realtor may suggest you reduce the price until you sell.
Conversely, if you feel the agent’s price is too low, you can always ask to try a different price however you can never price your home too low. If you did, you would have multiple offers in a few days.
If you price your home well and have professional pictures and a good realtor, you should get showings and offers within the first few weeks. If you are not getting showings, you are likely over-priced. Another sign that your home may be over-priced is if you are getting showings and no offers. However, if you get a manageable amount of offers right away, you most likely priced it well.
Finally, it’s also important to get the price right at the beginning because buyers are notified of new listings as soon as they hit the market. The first two weeks are crucial because you get the most views when a first goes on the market. If you over-price it, they will not come to see it, and your home will stay on the market for a longer period of time. Buyers always think something is wrong with a house that is on the market for a long time. But if you do the right homework ahead of time, you’re much less likely to have a bad experience by setting a price appropriate for the market that also works best for you.
Suzan Zeolla is a Licensed Associate Real Estate Broker with Houlihan Lawrence in Briarcliff. She has over 20 years of real estate experience.