Recently during a listing appointment,  a seller asked me, in my opinion, where he should price his home.  There are four other homes in his neighborhood, all similar to his, and priced almost exactly the same as each other.  Knowing that he is relocating in just a few short months, he was sitting there thinking, “How in the world am I going to get this home sold in three months when there are four others on the market just like mine, all at similar prices?  Am I stuck here?  I see no way out…”

 

Well this was my response to him, and I thought it might be helpful when you are trying to work through your pricing strategy.  Remember, the questions was in my opinion, where would I price his home…

 

If it is MY home, and I am putting it on the market as the owner, the first thing I determine is my “WHY” for selling.  Once I have figure out clearly what my “WHY” is, I base my pricing on that information.  If my “why” is to move my family by a certain date which is not too far down the road, and being out from underneath a mortgage will improve my quality of life and give me the ability to relocate with a lower level of stress, then I am pricing my home aggressively to get it sold fast.  If my “why” is to see what top dollar amount I can bring, and I am really looking to sell because I want to see how much profit I can generate, then I am pricing according to what I think my greatest potential is in this market.  In this second scenario, my reward could certainly be higher, but the risk associated with that potential reward is much more significant.  So with that being said, I guess you can arrive at two different pricing strategies and see which one fits your “why.”  If it’s scenario one, then I’m probably setting my price at $275,000-$280,000.  The strategy behind this is I want to bring people to my home with the price I set.  If a couple walked into four homes priced between $288,000 - $299,000 (your competition in the neighborhood), and then walked into my home which was very similar to the others (better than some even), if I am clearly at a lower price point it’s going to be virtually impossible for one spouse NOT to say to the other “Honey, this home is by far the best one of the bunch for the money - we can’t afford to let this get away.”  However, if I price my home in line with the competition, which is falling in line with scenario two above, then I am making the decision for that same couple to go see allthe other homes and try to figure out which of the five are best for them.  Sometimes that’s not an easy decision, and I stand a good chance of losing that buyer over something very small.  So you see, your “why” should be the most important decision in selling your home.  Everything else falls into place from there.  Do you want top dollar, or do you want to be able to get this off your plate and still walk away without losing?  Would selling your home quickly enable you to move forward?  Does a short timeline make sense, or does waiting out several months to potentially (but not definitely) get more money seem to be the right decision?  Ask yourself those types of questions, and you’ve answered your pricing strategy question yourself!  I hope this information helps.  Please let me know if you need anything, or have any other questions.