According to research, the median price for home listings was $405,000 in March 2022. This figure is an 8% increase from the median listing price of March 2021. As the real estate market in many US locations continues to thrive, you may be considering selling your home.
Unfortunately, many homeowners don’t know how to price correctly. Using the wrong pricing strategy can cause your property to stay in the market for long, delaying your financial plans. Besides, you may sell for a low value and fail to recover your initial investments.
Applying the proper home pricing strategies allows you to sell faster and make a profit. Here, we provide the ultimate guide on home sales by discussing methods you can use to set the asking price. We’ll also cover the suitability of each strategy under different conditions.
List the Home Below the Housing Market Prices
Setting home sale prices below the market value is a suitable strategy for various conditions. While you may be skeptical about this method due to the risk of losses, you can make significant profits since buyers understand the difference between the listing price and market value.
If you are in a hot housing market location, you will likely receive many offers when using this strategy. For example, if you price your home below the Florida housing market value, some buyers will be willing to pay more due to the low supply.
Moreover, others are highly likely to compromise their needs even if the house is not the perfect fit.
If you live in a neutral real estate market location, you can also price your home below the market prices. However, ensure you don’t set an asking price that is too low and consider the buyer’s expectations.
Setting your home’s asking price below the market value is ideal for a cooling market. This strategy allows you to stay ahead of the housing market trends and sell faster.
Set the Price Above the Housing Market Price
Another common home pricing strategy is setting the asking price above those in the housing market. Before using this method, determine if the target buyers may be willing to pay more. Such a scenario may occur if your home has unique features and high demand.
Since setting an asking value beyond the housing market price isn’t ideal for each situation, you should consider various factors. Understand that many buyers don’t like negotiating. Hence, they may ignore your listing if they don’t think the asking price is appropriate.
Other aspects to note when using this home pricing strategy are:
- It may limit your home’s exposure
- You may have to consider lowering the price in the future based on market trends
- Your home may stay in the market longer than the average duration
Setting your home’s asking price above the market value is ideal if you don’t mind the house staying on the market for an extended period. Besides, it’s suitable for regions with a promising seller’s market.
List Your Property According to the Market Housing Price
A home pricing strategy based on the real estate market is the safest option. This method allows you to attract more buyers, which may shorten the closing time. Moreover, you will incur less on showings and home maintenance during the listing period.
Before pricing your home based on the housing market, consider various factors. Such include:
- The condition of the home
- The location
- The structural design
- The current market conditions
Another aspect to consider when using this pricing strategy is the quality of the neighborhood. Assess your home’s proximity to amenities like shopping centers, parks, and schools. Further, consider unpleasant surroundings like a garbage disposal site, high-traffic streets and crime-related areas.
This information will help you assess if your home matches the housing market prices. Moreover, you can use it to adjust the value and attract many buyers irrespective of the surrounding.
Real estate markets can change drastically due to economic conditions and loan interest rates. Hence, always base your home’s price on recent market trends. Moreover, consult a local agent with a comprehensive understanding of such elements and their effects on home listings.
Base the Price on a Competitive Market Analysis (CMA)
A CMA home pricing strategy is similar to one based on market prices. The critical difference is that the first option involves estimating value based on properties recently solid in the area.
CMA is a suitable pricing method since it allows you to estimate your home’s value accurately. This measure sets your expectations and helps determine the appropriateness of home improvements before the sale.
When you opt for a CMA home pricing strategy, you should gather various details about the property. These will help you accurately identify competitors based on your home’s specifics.
Some key factors to consider when using competitor market analysis to set a listing price are:
- Your home’s location
- The year of construction
- Property taxes
- The square footage
- Notable home improvements
- External features like a detached garage or swimming pool
Once you assess your home’s value using CMA, weigh it against the market price. After that, adjust the listing to stay competitive and get better returns on your investment. You may then market the home, receive offers from companies like Emperor House Buyers and sell to the highest bidder.
Home Pricing Tips to Help You Get Better Returns
One effective way to get more profits from a home pricing strategy is to keep up with industry trends.
Read real estate news regularly to predict market behavior and avoid missing out on significant returns. Moreover, understand how buyers react to various pricing strategies under specific economic conditions.
Another home pricing tip to consider is an in-person evaluation. While an online assessment can help you evaluate a home’s value, it may not be accurate. This aspect is since other factors such as unique architectural designs and curb appeal will significantly influence demand.
Select the Best Home Pricing Strategies
The suitability of home pricing strategies may differ due to many factors. Understanding what each method entails can help identify the most appropriate way to value your home.
Likewise, it may prevent pricing mistakes that extend the closing time and lower profits. If you found this post helpful, browse this page for more articles.