Why List Price Is So Important

It’s no question that everyone wants to sell their house for as much money as possible. In this crazy market that we are currently experiencing homes are consistently selling above ask, which would make many people think that simply setting your list price way above market value will lead to a quick sale and more money in your pocket. This could not be further from the truth.

The Price Is (Not) Right

When a buyer is searching for potential properties to look at, they usually have a maximum price that they would consider. Listing a house too high above market value eliminates the chances of someone even seeing your listing at all when searching in the price range that the house is actually worth. In the chance that your house does make it into a buyer’s search results, the first thing they see is the price. They then look at the pictures on the listing and make a quick decision on whether they think the house looks like it is worth that price. If not, they move on and forget about that listing. It is essential that your home is priced properly so that more of the RIGHT buyers are seeing your listing and don’t disregard it because the price is too high.

Now, let’s say your overpriced listing does get past these initial filters and someone wants to make you an offer. There is a good chance that at this point your home has been on the market for a while with little to no interest since so many people have disregarded it due to the price. Listings generate the most interest in the first few days that they are on the market, so you’re already at a disadvantage. A buyer will know how long it has been listed for and feel no sense of urgency to submit a competitive offer before it’s too late. There is clearly not a whole lot of interest or competition from other buyers, so the offer that you get will likely be a lowball offer far below asking and with a list of conditions as long a Harry Potter book. The buyer has all of the power in this situation. The outcome of this is that you either sell your house for much less than you deserve with a complicated closing process full of conditions, or your home continues to sit on the market for even longer with less of a chance of getting a good deal.

The Sweet Spot

Your agent has conducted a thorough comparative market analysis (CMA) to determine what your house is actually worth based on recent sales in your area, and you decide to list your house right around the price that has been suggested. Potential buyers and their agents are sure to see your listing right away, and there will be instant interest due to a more competitive and accurate price point. Excited buyers will see an opportunity and realize that there are likely others who feel the same way as them, which will create a sense of urgency to make a move before its too late. This leads to multiple buyers making quick offers at the price you are asking (or higher), and they probably won’t include many (or any) conditions so that their offer looks more appealing. You can see how in this situation all of the power is in the seller’s hands. Having multiple eager buyers with competitive offers allows you to negotiate an even higher price and you will likely end up with a bidding war and a sale above asking. This is the recipe for a faster sale, a smoother closing process, and more money in your pocket.

Now that you know how important it is to come up with the perfect list price, I should touch on how you can make sure that you arrive at this price. I mentioned that your agent will conduct a CMA to determine what your home is worth, which I believe is by far the most important factor. Using actual data from other similar homes that have sold recently will give you proof of what price points work in your area. A CMA will also look at expired listings, which can reveal prices that have been unsuccessful in producing a sale. Combining all of this data will give the most reliable estimate of what price range is most likely to produce the best result. This entire process relies on another essential element: picking the right real estate agent.

Picking The Right Agent

You need to pick someone who you can trust to consider all of the variables and help you find the price that is going to get the best results. Many agents will suggest a very high price so that you get excited and pick them, but this just leads to stress and dissapointment when you don’t get the outcome that you wanted. It is paramount that you find an agent who cares about the right things and isn’t just telling you what you want to hear. With the right real estate agent by your side and the best price chosen for your home, you’re on your way to a successful sale.

Buyer & Seller Resources

Want to know how much your home is worth? Fill out my Home Valuation Form and I will send you a free CMA estimate within 24 hours. Find all of the information you need to get the results you deserve in my Buyer’s Guide or Seller’s Guide.