When it comes to pricing your home, there is a lot to consider. Recent upgrades, recent comps, what you paid for it, and when, and of course, the market. Gone are the days when buyers were waiving the appraisal contingencies and paying that over-appraised value. It was certainly a trend for a hot minute and the low-interest rates were allowing buyers to entertain it. With the interest rates now on the rise and inflation affecting our economy, most buyers can no longer afford to pay that over-appraised value. So, listing it too high may only cost you time and money. Pricing it too low may raise some flags and can hurt you and your neighbors. If you truly want to sell your home successfully, it’s important to list it as close to market value as possible.
If you’re considering listing your home below what you think it is worth, think about your neighbors and how it may affect them. Not only are you decreasing the value of your home, but you are also decreasing the value of your neighbors’. Pricing below market value could indeed lead to multiple offers for you and possibly over the asking price. However, you should keep in mind that it could also deter buyers by leading them to assume there are issues with the home. If you are considering pricing it below market value to list it “as is” this will raise even more red flags and possibly leave you with lowball offers. For a faster, more successful sale, pricing your home at market value is best for everyone in the end…Including the buyer.
It’s easy to want to price your home for more than what it’s worth. However, over-pricing your home can cost you some serious time and may only result in you coming down to market value in the end. Unless you have a cash buyer or the buyer is willing to waive the appraisal contingency, the home still must appraise for the sale to go through. Should the home appraise below the purchase price, the seller is often expected to come down to appraised value. You could also be pricing out your potential buyers by listing the home in the wrong price bracket. This will only add to your market time and too much market time along with price reductions can often send the wrong message. Study the comps in the price range you are wanting to list in and put yourself in the buyer’s shoes. If you’re wanting to list your home for $400,000 but see there is a house down the street listed for $350,000 with a nicer kitchen, finished basement, and more square footage, which home do you think the buyer is going to go for?
At the end of the day, you can list your home at whatever price you want to list it at. It’s the value you choose that will determine your success. Market value will attract more buyers, allow for a quicker sale, and give you a higher sale price. Consult with your REALTOR® to determine what that value is and trust what they advise you. Until next week!
Eve Leombruno, 2023 MBOR President