Pricing is often seen as just a numbers game – a science, if you will. But strategic pricing is very much an art, relying on years of experience combined with intuition and a thorough understanding of where your local housing market has been and a “best guess” about where it’s going.
Whether it’s a buyers’ or a sellers’ market, here’s where your real estate agent shines. A good agent knows that pricing strategies depend on many factors; what works for one home may not work for another.
In a seller’s market, your agent might recommend pricing to encourage multiple offers. However, this will depend on the neighborhood and on the home’s value. The best candidate for this strategy is a well-maintained home in a desirable area where inventory is low. In this situation, the listing price will likely be at the lower end of a price range that reflects the home’s fair market value to encourage competing offers.
In a buyer’s market, the factors influencing price are the same – the neighborhood and the value of the home – but the strategy is very different. Here it’s all about demand and competition. Your home is in direct competition with others for sale in your neighborhood, and it should be priced to compare favorably. It also should be in top condition, and your agent may recommend fix-ups and staging to highlight its attributes.
Your agent will also look for trends. If properties in your area consistently sell below asking price, prepare for offers below the listing price and expect to have to adjust, particularly if you’re in a hurry to sell.
Whatever the market, a well-thought-out pricing strategy can make the difference between selling quickly at a fair price and sitting on the market with an overpriced property.
It’s worth getting it right the first time.