Pricing Your Home
Pricing a home is a skill. There are so many different factors and variables involved that pricing can literally change from one week to another. Knowing when to price, how to price, and how to market is a strategy that only seasoned and experienced real estate agents truly understand. Novice real estate agents, amateurs, or those that do this on a part-time basis, can't necessarily know or understand how pricing can affect a home's ability to sell. Pricing to high means you may sit on the market longer than you want; pricing to low and you might leave money on the table.
There are reasons to overprice and even underprice but it all depends on the market and the type of home. This is where expert Las Cruces Realtors® like Z Real Estate, and play. We not only look at the home but the market, the neighborhood, and the types of buyers currently out there. All of these factors play into what how and when to price the home.
As Las Cruces Real Estate Agents we follow several basic as well as detailed and specific factors when pricing your home:
Clearly, if you are selling your home to a buyer that's financing the property it will need to pass appraisal. This means that no lender will loan money on a home that's not worth how much the buyer is offering. You can price your home at whatever price you want but if the buyer needs financing, no lender is going to loan money on a home is overvalued. This means that the home needs to come up to the appraisal amount and this is where comparable sales come into play. We look at all of the recent sales within the last 3 to 6 months as well as pending sales, and "coming soon" properties. This will give us a good sense of a price range to start with.
We want to look at the price banding, this means looking over the current inventory in your specific neighborhood and finding a less crowded price point. Many prices within an area tend to get bunched up and it could become a blur to buyers. For instance, if there are several homes in your neighborhood price between $250,000 and $260,000, and the next set of home start at at least $280,000 and up, we need to take advantage of that price span between $260,000 and $280,000.
Stay away from obscure and century pricing
This is the $19.99 sounds better than $20 type of pricing. It doesn't always work. Some agents will want to list a price for $388,888 because it stands out, however, pricing a home at this random and obscure number can distract buyers and actually give a bad impression of the home and the seller. We need to price it correctly from the beginning and that takes strategy and research.
Consider the buyer
You were once a buyer and if you're selling your home you may be a buyer shortly so think about the buyer and put yourself in their shoes. Try to put aside your emotional attachment to your home. Look at what else is selling in the area and what buyers are also looking for. You want to appeal to a wide range of buyers but it's important to know your competition so that you can stand out from the rest.
Is underpricing a good idea?
This is a tricky strategy but can work with the right home and in the right market. Underpricing a home can drive up a bidding war causing more buyers to submit higher offers. This is a strategy that cannot backfire so it must only be applied when it truly works for the situation.
If you'd like a free listing presentation on how we would price your home, contact us below. We understand the Las Cruces real estate market and can help you price your home from the beginning to get the price you want and get your home sold.