How Should I Price My Home?
Updated: Aug 12, 2019
The most important part of selling a home for most people....the PRICE.
How much am I going to get for my house? Why don't we price it above the comps since we know everybody is going to lowball us and try to get a deal? Why would we ever want to price it lower than the comps?!
These questions will all be answered here shortly, but first I think it is important to make clear that every situation is unique and should be viewed from different angles, just like every piece of real estate. This is just a broad view of the market behavior and what I see working every day.
When coming up with the price for your home, it is important to be as objective as possible. Yes, you have lived there for 20 years and watched your kids grow up there. Heck, there's still marks from when you measured how tall they were on the doorway to the kitchen. While that might make the home more special to you, it unfortunately has no effect or a negative one on how the buyers view of your home.
It is important to see your home from the buyer's perspective, and one of the best ways to do this is to go look at some homes priced similarly to what you are wanting yours to be priced at with a Realtor. After touring just 2 or 3, you will begin to start pointing out little things that you don't like (things that you might not even realize are in your own home as well). Once you start picking up on these, it is easier to go through your own home and figure out what might be seen the same way there to prospective buyers. This will give you a much more realistic idea of what certain things sell and are worth in your market.
This leads into the next question of pricing above comps on the market, since most of us expect buyers to lowball and try to get a steal.
This might have been true years ago, and still hold true for some buyers who haven't been active in the market in many years, but we are currently seeing an average difference in listing to sold price of 96-98% across the Lubbock market. That means a home listed for sale for $100,000 is most likely going to sell for $98,000 based on the data we are seeing. Lowball offers are no longer producing results for buyers in Lubbock, Texas.
Is there any reason why we would ever want to price a home at or below the comparable sold properties in the neighborhood? YES.
Have you ever gone to a silent auction and noticed that the starting price on everything is far less than the actual value of what is being auctioned? This is done because it gets people on the hook, and encourages more bidding activity. Eventually, the competing buyers continue outbidding each other until the item is finally sold to the highest bidder. The same concept applies to real estate and is something to be considered before overpricing a home. You're more likely to make a good chunk of change selling your house quickly and at a good price by pricing below competitors than you are overpricing it and letting it sit on the market, requiring price reductions just to keep buyers looking.
I hope all of this was informative, and if you have any questions or real estate needs do not hesitate to reach out to me. You can reach me directly at 469-744-3610.