Of all the pieces that come together to get your home sold, pricing is the most important because it combines all factors… including location, condition, amenities and terms. When buyers find a property that suits them and they perceive there is a value in relation to price and other factors, they will buy the home.
To set your price to get a sale, establish your target market and find current listings and recent sales that are comparable based on all factors involved, making price adjustments as needed to compensate for differences. Your pricing 'sweet spot' will be below comparable active listings (they haven't sold yet)… and below recent adjusted sales in a declining market or at/above recent sales in an increasing market. Where you decide to price also depends on your motivation. Keep in mind that not only must you find a buyer willing to pay the price, but in most cases an appraiser will also have to confirm the value.
One pricing strategy that works is to price significantly below comparable properties in the hopes of enticing a quick sale and possible multiple offers. Offers may also come as a result of other outstanding factors, such as exceptional location, condition or amenities. People search with their heads, but buy with their hearts…if your property 'speaks' to buyers so they visualize themselves living in your home and your price is better than other properties they are seeing you will get an offer.
Today's Internet-dominated market also suggests another pricing strategy. Pricing properties has traditionally favored setting a price just below a price point as with other retail pricing, such as $199,900. The fallacy of this strategy in today's world, however, is that database search engines don't find properties that are 'close' to a price point. If a buyer is searching online (about 90% of today's buyers!) for homes in the $200,000-$250,000 price category, they won't even see properties priced at $199,900. Pricing right at $200,000 can be a strategy that works in your favor, doubling your reach…buyers searching both in the $xxx,xxx-$200,000 price range and the $200,000-$xxx,xxx price range will find you.
Once your property is listed, keep re-evaluating and making changes based on showings and feedback…or lack thereof. Remember…price overcomes objections.