Selling Your Home? Don’t Let Emotions Sabotage Your Pricing Strategy

Setting your home’s asking price is one of the most significant decisions you have to make when listing your home. Price it too high and your home might stay on the market for a long time. Price it too low and you might shortchange yourself. We’ll cover the most effective strategies for listing your house at its best price point, so you get the most value and can sell your home quickly.

Understand the Market

Before we jump into how the market affects your asking price, realize that the housing market can be dramatically different across the country. Do your research to learn about the market conditions in your area. Specifically, are you looking at a seller’s market or a buyer’s market?

If there’s not a lot of housing inventory and more buyers than homes, you’re looking at a seller’s market, so you can price your home more aggressively. On the other hand, if there aren’t many buyers and there are lots of homes to choose from, you’ll have to price your home competitively.

Sometimes, the market is balanced between buyers and available homes. If that’s the case, keep your pricing fair and don’t expect to get much more for your home than it’s worth. Market conditions, like prevailing mortgage interest rates, can often determine the level of buyers that can afford to buy homes.

Analyze Comparable Properties

Ask your realtor to run a comparative market analysis (CMA). This report compares your home to similar ones in your area. This gives you a good idea of what buyers are paying for similar homes. The report takes into account your home’s square footage, number of beds and baths, condition, age, and location.

Avoid Overpricing

If you price your home for more than it’s worth or what similar homes are going for, you’re limiting your pool of eligible buyers. Plus, buyers will see more competitively priced homes as better deals. And, if your home sits on the market for very long, you’ll probably have to cut the asking price.

Pay attention to how many offers you get during the first two weeks. If your home is not attracting much interest, quickly adjust the price so it’s more competitive and doesn’t linger on the market.

Use Strategic Pricing

Listing prices are very intentional, often using psychology to support their determination. For instance, items priced under century numbers (round numbers) are proven to be more attractive. So, instead of listing your home at $505,000, psychological pricing suggests asking $499,900. This also expands your pool of potential buyers to anyone searching for homes under $500,000.

To use psychological pricing, avoid awkward prices and instead select round-number brackets, such as $250,000–$300,000 or $500,000–$550,000. 

Evaluate Unique Property Features

If your home has special features that make it stand out, include these when setting the price, because they make your home more valuable. Here are some examples of unique property features:

• Bathroom or kitchen renovations
• Location near good schools or parks
• Larger lot or located in a highly desirable area
• Swimming pool
• Antique architecture

Avoid Emotional Pricing

One of the worst things you can do is let your emotions determine your home’s listing price. While you might feel your home is worth a lot because it has sentimental value or has been in your family for generations, these feelings don’t translate to increased market value.

Remember, your comparative market analysis is one of your most valuable tools.

Leverage Professional Appraisal

Listing your home can be stressful. Putting together a team of professionals can make the process so much easier, especially if you hire a professional appraiser. They can give you an unbiased estimate of your home’s value.

You should also consider hiring an experienced listing agent who can help you put your home on the market and adjust the asking price as needed.

Plan for Launch Impact 

Ideally, your home should get some buzz or at least several offers within the first week or two. This lets you know the home is priced right. If the housing market in your area is hot and you face stiff competition, you can generate interest by underpricing slightly. This could lead to multiple offers or even a bidding war, where you sell the home for over asking.

Monitor and Adjust the Price

There is the possibility that your home won’t get any offers or have showings within the first few weeks. If this happens, talk with your professional team about tweaking the price.

You should also be aware that the market is typically more active during spring and summer when most people are looking to move. Listing your home during the fall or winter might mean making more price adjustments.

The Bottom Line

Putting your home on the market can be a stressful time, but it’s important to use professional advice and market data when making decisions about the asking price. Instead of letting your emotions set an unrealistic price, professionals and data can help you list the home so it’s more likely to sell quickly and for the most value.