A famous little blonde girl of fairy-tale lore made it look like child’s play to master the art of finding the ‘just-right’ solution to her various lifestyle challenges (e.g., finding a bowl of porridge, a chair and a bed that suited her fancy).
In the real-life world of real estate, though, it is much more difficult to find the ‘just-right’ price at which to list your home. There are loads of moving pieces, competing priorities and voices to be sorted through, internal and external. Sellers, if you work from a definition of the ‘just-right’ price for your home as the one at which it will sell without lagging, then it is possible – necessary, actually – to stop the chaos and start sorting and selecting the inputs that will get you there.
Here’s a short(ish) list of those factors:
- Don’t just look up and down the street, or in your subdivision – also look at similar homes in nearby neighborhoods or even nearby towns that a buyer who likes what your home might also target.
- And don’t just look at quantity – look at the quality, or nature of the competing listings. Is the competition mostly comprised of ‘regular’ equity sales, short sales or foreclosures/REOs? If you’re a regular sale in a sea of foreclosures, your price competition might be steep, but there may be other advantages of your listing that can offset that, to a degree.
So, what should you do? Get your agent to help you understand the competition level and the trends in number of listings on the market in recent months. Then, crash some of the competing listings’ Open Houses to scope out their condition and collect the rest of the intel listed here, before factoring it into your pricing decisions.5. Timing. If your neighborhood’s award-winning school district or abundant colleges drive much of the buyer demand, you might be able to ask or get more for your home in June than in October, once the school year is in full swing. If you live where it snows, listing it while it’s easy for buyers to get around might pay off, literally. There are a number of area-specific timing considerations that you may need to calculate into setting your just-right list price. Chances are good that you know what they are where you live, but your agent may have some novel insight on the matter, as well. 6. Motivation Levels. How motivated are you? Are you just testing out the market to see if you can hit a target number, or do you need to have escrow closed by a particular date to make your life and job plans run smoothly? What is your primary motivation? Price, timing, closure, making sure your home passes into caring hands or just getting rid of a home or a mortgage that no longer serves you? And how motivated are buyers in your area? From insights like:
- Average number of days on market
- Average list price vs. sale price
- Trends in comparable sales – their number and sales prices
- Trends in interest rates
- Trends in competition levels
- And insights like where you are in the seasonal changes that impact buyers in your area, If you need more data before you make the understandably scary move of cutting your list price, ask your agent to ask for feedback from the brokers and agents who have shown the property or attended Open Houses – or even to run the property past their own colleagues at their office or marketing meetings. Once you have this input – listen to it and factor it in, along with the other factors.
you can work with your listing agent to gauge whether buyers are so motivated that they will not be deterred by a premium list price, or whether you’ll need to use a discount or value-based price to churn up motivation in a market of fence-sitting buyers.7. Agent and Market Feedback. So, you came up with a list price that you thought was ‘just-right,’ but you’ve had little or no Open House traffic or private showings. Or you got lots of showings, but no offers – or nothing but lowballs, anyway. It’s not too late to get to the ‘just-right’ list price for your home; in fact, time is of the essence if you want to take advantage of the swelling levels of buyer interest and activity that has sprung this Spring. In many scenarios where a home lags on the market, the list price was set or maintained against the express advice of the listing agent, who urged the seller to list it lower. Or maybe you and your agent agreed on pricing early on, but they’ve been asking you for a price reduction for months now. If you trust your listing agent, and they have a strong background for getting homes in your area sold on today’s market, then it behooves you to at least take their pricing advice seriously, whether or not you follow it to the letter.