What makes pricing strategic?

One of my most frequently asked questions is “How do you price my home”? Pricing strategy is important because it will directly impact buyer impressions, market demand and ultimately time spent on market. The three main keys I am looking for to guide you are:

Competing homes on market

Buyer demand

Sales history

• Competing homes on market– what homes are currently for sale that are direct and indirect competition with yours? Direct competition is a home that appeals to the same buyer pool. Homes that are similar in size, number of bedrooms/bathrooms and overall property condition are all direct competition. Indirect competition are homes for sale nearby that are appealing to a different buyer pool. These are homes that are significantly larger or smaller, have different bedroom/bathroom count or are in a different property condition category-maybe they were just updated or they need significant work. We want to consider how your home compares to these and note which homes we think are likely to sell first.

• Buyer demand– what price range are buyers exploring most in the area? I have access to data that shows me which pricing sector is getting the most showing appointments. If your home is close to a pricing bridge, we may want to adjust up or down slightly to capture that additional showing activity. What is a pricing bridge? It’s a rounded number that drives search data for most major real estate websites. It’s usually $50k-$100k increments. For instance, a home priced at $395k will show up for searches in the $350-$400k range. That home will also likely appeal to buyers in the $400-$425k range, but if a search is set at $400k, you will miss that pool of buyers altogether.

• Sales history- what price does the market actually support? We’ll look at data from closed sales to see asking price to sales price ratios, types of buyer financing and days on market. One of the best ways to reduce your days on market is to start out at a competitive price. Closed sales are the true indicator of market value, as not every home sells for it’s asking price.

A strategic price gets you where you’re going…faster. Ready for a consult? Reach out and let’s talk about a strategic price for your home.