Dear Sellers,
The absolute worst thing you can say when you are about to list your home for sale and are trying to decide on an asking price is, "Let's just try..." Meaning, let's just try for a price that we know is too high, doesn't make any sense, and that we probably won't get. Not the greatest strategy.
When having the pricing conversation, our sellers often ask us when is the best time to sell, if the market will pick up or slow down in coming months, or if we think now is the best time to list. And typically, our response is the same: we don't have a crystal ball, but if you price your house right, it will sell. Period.
How do we get to that magic number then? Well, it's all about the comps. The comparable properties are the houses that have sold in the last six months in the same neighborhood or zip code. They have similar square footage, about the same number of bedrooms and baths, and a comparable lot size. Based on these sold comparables, we calculate a price per square foot. Then we multiply your square footage by that number, and add to or subtract from that number based on the features and upgrades of your home versus the comparables.
Despite these logical calculations, so many sellers are worried about underpricing their home, as they don't want to leave money on the table. Who would? But here's the thing. Your house is going to sell for what it's worth no matter what. So if you happen to price your house too low, you are very likely going to end up receiving multiple, competing offers, driving up the price. But on the flip side, if you price your house too high to begin with, if you "just try," then your house is going to sit, accumulate days on market, you'll have to drop the price maybe even several times, and the listing will eventually become stale. And often in this case, you will end up getting less for your house than you would have if you just priced it right to begin with.
We have good examples for both these scenarios. Recently, we had a buyer interested in a listing that was a competitively priced, absolutely gorgeous home. We scheduled a showing right away, but we were not alone. The sellers ended up getting eight offers in the first weekend on the market, and ultimately settled for more than $50,000 over asking price. A not so happy ending is another listing in the same area. We spoke to the sellers before they listed their home and recommended a price, based on our research, that we thought would be competitive and would get them a great offer in a relatively short amount of time; because, really, who wants to have to keep their house perfectly clean and "show ready" for more than a few weeks. Well, they decided to list with another agent at a MUCH higher price. Fast forward to the end of the story: after a year and a half on the market and six price reductions later, the house finally sold. And we'll give you one guess as to what price it sold for.
There is a moral to this story. Well, maybe two. Price you house right the first time around. And listen to your agent. We know what we're talking about. We've done this once or twice.
Yours in Real Estate,
The O'Hara Group
Photo credit to @sassanovaofbaltimore, @maewoodphotography_my, @shoptini, @a.list_travelteam, @spinnakerbayapts