Selling a home is an exciting but also fraught process. Selling your home can open up endless possibilities: a new house, for instance, or even a new city or state: a fresh start on the next chapter of your life. But there is so much to consider, and even more to organize, clean, and repair before your home is ready to be listed.
Once the house is on the market, though, it’s smooth sailing – the sale is practically in the bag. After all, you did all that prep work to get your house beautiful and appealing, right? Unfortunately, that’s not always the case.
The price at which you list your home can have an even more significant impact on the rapidity of your home sale than any other preparation you undertake. Pricing your home too high can restrict traffic to your home and result in few or no offers. On the other hand, if your home’s selling price is too low, then you could be cheating yourself out of valuable – or needed – profit. So how do you know if you’ve priced too low or too high? Below we’ve created a list of signs that your home’s selling price is either too high or too low.
You’ll know your home’s selling price is too high if…
1. You aren’t getting any offers!
A house that is well-priced will get offers indicative of the market. If it’s a buyers’ market, the house may get a few offers right around or possibly a bit below asking price. If it’s a sellers’ market, the house will typically get more offers at or above asking price. If your house isn’t getting any offers, though, it could be a sign that your home’s selling price is too high. Buyers will see your house listed alongside other houses of a similar price – only those houses may be bigger, newer, have more features, or be more recently renovated.
Hire a real estate agent who is familiar with the market in your area and can guide you toward setting a price that will draw offers in, and will make your house look competitive against other houses on the market.
2. You are getting very low offers!
Another sign that your house is priced too high is that when you receives offers, they are much lower than the list price. Buyers want the best deal possible on their home, and if they sense that your house is overpriced, then they may wager that you aren’t getting many offers and try to lowball you in an attempt to get your home for less.
3. Showing agents say so!
Your real estate agent will be able to contact other agents who show your home to their clients. Make sure that your agent solicits feedback from the prospective buyers who tour your home. These agents are often working with buyers who are actively looking, touring multiple homes per week – or per day. They will have real time advice about the other homes on the market and how yours compares. If the showing agents are consistently expressing that your home is overpriced or more expensive than comparable homes (or, alternatively, similarly priced to larger, more up-to-date homes!), then you may want to reconsider your selling point.
You’ll know your home’s selling price is too low if…
1. You get a lot of offers very quickly!
Your house is on the market for just a few hours, and you get an offer! And then another…and another…and then the offers are rolling in! This is what you dreamed of, right?
Be careful what you wish for. While multiple, fast offers can be a sign of a sellers’ market, you are also running the risk that you may be priced too low and buyers want to jump on what they see as a great deal. Of course, being in a multiple-offer situation means that you can also send the offers back in an attempt to begin a bidding war, which will certainly drive the sale price up a bit. But just think…if your house is desirable, and you had priced it higher, you could have a bidding war netting you even higher profits!
If you price your home too low, you’re really cheating yourself out of the profits that you’ve earned through your toiling and loving of your home, its constant upkeep, and any improvements you’ve made.
2. You’re getting offers at – or even above – asking price
Most buyers want to negotiate – and most sellers do too. Therefore, in many cases, buyers will submit an offer that they think is reasonable, but often below asking price in an attempt to open the negotiations and see how flexible the seller is with the home’s price. If your house is underpriced, buyers will offer you full price, or even slightly greater than full price because they won’t want to miss out on what they see as a too-good-to-be-true deal.
Be wary of offers that seem too generous – they buyers may be sending you a signal that you could have set a higher list price.
How to Make Sure Your Home Price is Just Right
The best way to make sure your home is appropriately priced to be both attractive to buyers and lucrative to you is by hiring a licensed real estate agent. A real estate agent has the knowledge and experience to make sure your home is properly prepared for market and is listed at a price that will help you sell it within a reasonable time frame (without, of course, sacrificing your profit!).
Make sure you listen carefully to the advice of your realtor to ensure that your home selling experience is optimal – and, of course, that if you are moving on to buying another home, you get the best deal and maximize what you can do with the money you make from the sale of your old home! Realtors’ licensing and ethics requirements mean that you will be able to trust their advice, making the process smoother and easier for you!