The importance of a home’s initial list price
So glad you asked me that, as it can never be emphasized too much! A home’s list price is soooo important. There are a number of reasons why a home’s initial list price is so important and we need to look at a two factors in particular that can affect the outcome or goal you have in selling a home and why your home’s initial list price gets your home sold.
To answer this question let’s look at the right Buyers and how you’ll be competing with your nearby neighbor’s home for sale to sell your home.
The Right Home Buyers
The right home Buyer is really the key component of any home sale.
Let me tell a story to illustrate the importance of the right Buyers.
Buyers, Ethan and Chloe, have done everything right that includes getting their credit in prime condition, saving for a down payment and having obtained that much needed pre approval letter that they’ve been advised is needed to demonstrate their strength as a Buyer. They’re now ready to find a home just like the home you’re selling as a home Seller. Great, the perfect Buyer for your home – bring ‘em in!
Ethan and Chloe have been pre approved for a mortgage in the amount of $350,000. This means if $350,000 is their maximum, they’ll likely be looking within the range of $325,000 – $350,000, where they can afford to buy a home. I’m sure they’re viewing a daily, automatic search of new homes that hit the market priced between $325,000 – $350,000.
On an important side note: The Real Estate Agent you hired to sell your home came after an exhaustive search of searching online over the internet and after successful Agent interviews, you landed on the best one for the job; you’ve discovered that she knows Real Estate, as you’ve read her articles she’s written on her website and listened to her Real Estate know-how as she spoke to you, she sells homes fast and for top dollar, has super reviews from prior customers and is a top producer in her local Real Estate office. Okay, you’re feeling pretty good about her, even after you initially thought that your home’s initial list price would be $375,000 and you had also wanted to leave some room for negotiations. After hearing the sound reasoning behind the Agent’s analysis, you agreed to the Agent’s recommended list price of $350,000. (And yes, it’s possible that it could have been a “he” that you discovered too! – smile)
Now back to Ethan and Chloe. Any home Seller would welcome an Ethan and Chloe-like Buyer, one so seemingly financially sound: ready and able to buy a home listed for sale at $350,000. Perhaps it’s your home that they want to buy as your home is located right within the neighborhood where they’ve been looking at homes! How exciting! Did you know that?! Now you’re thinking, please let Ethan and Chloe see your home. Thank goodness you listened to your Real Estate Agent and listed your home for sale at $350,000 and not the initial list price you had thought of at $375,000.
Competing with your Nearby Neighbor’s Home for Sale
It will be more than likely that your home will not be the only home on the market for sale and you’ll be in direct competition with your nearby neighbor’s homes. Your home needs to stand out from the pack and there are a number of ways in which you can accomplish that, however for today’s discussion it’s all about your home’s list price. You never want to send an Ethan and Chloe Buyer to your neighbor’s home that is listed for sale and similar to your home.
Imagine if you would have listed your home at the higher list price of $375,000 that you were initially considering – what would have happened to Ethan and Chloe seeing your home? I’ll tell you what would have happened and it won’t sit easy with you. Ethan and Chloe would not have seen your home, but rather any of your neighbor’s home that were priced correctly. Why would they want to buy your home, when they could buy another nearby home that’s the same size with similar features for less money?! This is probably one of the most overlooked factors a home Seller misses when they price their home too high. They’re pricing themselves out of the market, missing well qualified home Buyers like Ethan and Chloe and sending these qualified home Buyers to their neighbor’s homes for sale. Then you scratch yourself on the head when you see that your neighbors Joe and Rita just sold their home. You think how did they sell their home before your home as your home is so much nicer. Is it really or are you just putting too much emphasis on the wonderful, cherished memories from your home, that unfortunately do not add any additional value to your home.
Remember our above discussion about the list price search range that Ethan and Chloe had chosen? If they were searching for homes in their price range of $325,000 – $350,000 and you priced your home at $375,000, they would have never seem your home. Well you think, you’ll get the other home Buyers that have their search setup for $375,000 – $400,000. That may be the case as these Buyers will see your home, however home Buyers that are searching in the higher price range will discover homes for sale that are larger with better features for the same amount of money as your home, so why would they choose your smaller home with less desirable features for the same price? They wouldn’t. Your home sits. Unsold.
Eventually, after not having any offers after several weeks on the market you realize that you’re going to have to reduce your home’s list price as you chase the market on the downside. What can be worse?! Realization that you’ll have missed out on the excitement period those first few weeks when a brand new, shiny listing hits the market priced right. Now your home languishes on the market making home Buyers wonder if there is something wrong with your home for not having sold by now after weeks and months having gone by. This is what describes what worse is all about. Is it all starting to make sense now?
Plus, and a big plus, when your home’s initial list price is right on the money, you’ll attract a greater number of the right Buyers, which can trigger an avalanche of offers moving your list price up and over the initial list price. The greatest number of home Buyers will see your home when it’s priced right at or just below fair market value. Now imagine that?! This is a scenario that commonly plays out, particularly in a Seller’s Real Estate market.
“The Early Bird gets the Worm, when Setting the Right
Initial List Price for your Home” – Lynn Pineda
Or in this case, the Home Seller quickly gets a well qualified Buyer willing to pay market value for a home.
I bet you can now see the value in the pricing your home right from day one; the day that a home hits the market as anxiously awaiting home Buyers, like Ethan and Chloe, are eager to knock down your front door. Price it right and they will come in droves, particularly in a Seller’s Market as is currently the case in many Real Estate markets; you’ll probably have a number of Ethan and Chloe-like home Buyers coming to visit.
Don’t wind up being one of the unsolds on the market when going with the wrong initial list price.
Why is My Home’s Initial List Price So Important?! https://t.co/hdkZCqXixO pic.twitter.com/SQ6RgssRaF
— Lynn Pineda (@LynnPineda) July 7, 2016
Further home selling reading value:
Demand keeps home prices rising by Housing Wire
How can you sell the home nobody likes? by Debbie Drummond
Boosting Home Value with Eco-friendly improvements from Bill Gassett
Tips for Selling a Home with kids without the Stress by David R. Miller
Book an appointment now to learn more about setting the right initial list price when selling a home in Coral Springs, to Boca Raton and Southeast Florida. Call/Text Lynn at 954-464-1100 or email Lynn at LynnP@ImagineYourHouse.com
Today’s Real Estate article “Why is My Home’s Initial List Price so Important?” was written by Lynn Pineda. You’ll find Lynn selling homes in Southeast Florida in the cities of Boca Raton, Boynton Beach, Coral Springs, Delray Beach, Coconut Creek, Deerfield Beach, Margate, Parkland, Pompano Beach, Tamarac, Sunrise, Plantation,Pembroke Pines and Ft Lauderdale areas within Broward and Palm Beach counties.
Lynn Pineda, a licensed Southeast Florida Real Estate Agent serving Southeast Florida for over 11 years. Keller Williams Coral Springs Realty. Real Estate Promises Delivered. You can speak with Lynn by calling/texting her at 954-464-1100 or you can email her at: LynnP@ImagineYourHouse.com if you need to buy or sell a Southeast Florida home. Your local, trusted professional when it’s time to buy or sell a home. Real Estate promises delivered.
This is great information….hope you don’t mind if I share it with my clients. Sometimes it is so hard to get them to understand.
Great information, thank you.