Before you decide to put your home up for sale, you first need to decide on its selling price. But this step alone could already cause distress among sellers. After all, the right home pricing strategies can help you make a profitable sale, but make a mistake and your home can be on the market for several weeks.
If you are thinking of selling your home and need some guidance on how to set the price, this article will show you four effective home pricing strategies. Read on to find out what these are, when to use which, and how you can use these strategies to find the perfect selling price for your property.
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#1: Set the Price Below Market Value
If you want to sell your property and turn a profit, setting its price below the market value can be counterintuitive. But no matter what type of market you are in, pricing your home at a lower value can get you more offers and possibly at higher prices.
Correctly using home pricing strategies like this depends on your goals and what type of market you are in:
- If your income property has some issues that you have not been able to address but you are in a hot market, this real estate pricing strategy could still get you multiple offers.
- If you are in a neutral market, then this home pricing strategy would only work if your home does not need any major repairs.
- If you are in a downturn market and you need to make a quick sale, buyers would be looking at the price first. So pricing below market value can get you more views.
However, be careful with setting the house listing price too low. Buyers rarely offer tens of thousands of dollars above the listing price. If the price you set is about $100,000 (or more) below market value, you will risk selling your home at a loss.
#2: Set the Price Above Market Value
If setting the price below market value makes you, the seller, raise your eyebrows, then pricing above market value will make your agent nervous. But maybe you think that your home is move-in ready and the interior is worthy of a feature on HGTV. If that is the case, then you might attract someone who is willing to pay your asking price. Home pricing strategies like this could also work if there are few to no other options available in your area.
Because setting the price above market value is riskier compared to the other home pricing strategies listed in this article, you have to be even more careful in setting the price. It is better to price as close as possible to the market value. If you are in a hot market, buyers who really want to live in your neighborhood would consider your listing. And do not expect to negotiate. Many homebuyers do not want to go through that at all to avoid insulting the seller with a low-ball offer, so they would rather stick to their budget.
If you price your home too high, your property might be on the market for longer than you want it to be. Its above-the-market price will already limit your home’s exposure, and buyers’ desire to look into your home decreases the longer your listing is active.
#3: Set the Price at Market Value
If you find pricing your home below or above market value to be too risky, then one of the safest home pricing strategies is to set it at market value. To do this, you will need the help of a realtor to properly estimate the value of your home. They will look at the following factors:
- Your property’s location
- Its structural and cosmetic conditions
- Other features that add value to your home
- Prices of similar properties in the last 30 to 90 days
- Prices of similar properties that are currently on the market
- Listed properties that had either expired or been withdrawn
- The current supply and demand
Having a professional appraise the value of your home can help you make a better decision on what price to set. So even if you only had one interested buyer, you can already close the deal with confidence. If you happen to get multiple offers, then you could set a sale price record and turn a bigger profit.
Because pricing your home at market value is the safest option, the only way your property could not sell is if you had a weak marketing plan. So no matter what pricing strategy you use, be sure to expose your listing to as many buyers as possible.
#4: Set the Price Using Comparative Market Analysis (CMA)
If you do not want to hire a professional to appraise your property, you could still determine its value using comparative market analysis or CMA for short. This is a method of estimating your home’s value based on comparable properties that were recently sold in the area. Home pricing strategies that require you to evaluate your home and the market and do some calculations will help you get a more accurate estimate of your home’s value.
The first step in using CMA is to gather the necessary information about your property, such as:
- Its location
- Square footage
- Number of bedrooms and bathrooms
- Year it was built
- Any recent renovations
- Notable interior details
- Exterior features such as a swimming pool or shed
- Tax information
Next, you need to evaluate the quality of your neighborhood. Consider the area’s proximity to amenities such as schools, parks, and shopping centers and its proximity to unpleasant locations like garbage dumps and highways. You should also take note of any significant curb appeal issues. Once you have this data, you then need to look for comparable properties—or comps—in your area. You can do this more efficiently by using an online tool like Mashvisor.
Mashvisor’s Property Search feature allows you to find other properties in your area that are similar to your home along with their respective information. You can filter your search by location, property type, and the number of bedrooms and bathrooms. When you click on one listing, you will not only find information about that property, but you will also see data on comparable homes.
Now that you know the value of similar properties to yours, you can calculate the average price per square foot of your comps, then multiply that by your home’s square footage. While real estate experts say that the resulting amount is already a fair estimate on your property, you can adjust it further depending on the differences in value between your home and the comparable properties you looked into.
Related: 5 Best Property Search Tools for Investors 2021
Selling Property Is Easy With Mashvisor
Whether this is your first time selling your home or you are an experienced real estate investor, these four home pricing strategies can help you sell at top dollar and fast. Using CMA and pricing your property at market value can minimize the risk of a stale listing. Meanwhile, setting the price below or above market value gives you a chance to earn a bigger profit.
Now you know about the different real estate pricing strategies. When you have decided on the price and are ready to sell your home, you can list it on the Mashvisor Property Marketplace. Here, you can reach many serious buyers who are ready to purchase your property. This platform also enables them to communicate with you directly so you can have a smooth transaction from negotiations to closing.
Start out your 7-day free trial with Mashvisor now.