When the time comes to price your home for sale, you may be tempted to start with the price you originally paid, add in a markup to reflect the various upgrades or repairs you made, and wait for the bids to roll in. Unfortunately, this strategy is not likely to be a successful one in today’s market. With many home sellers having to compete with foreclosures and overall low prices, College Station and Bryan home sellers need to – above all – price their homes aggressively.
So where to begin? Many people determine their asking price by a combination of comparing to their neighbors’ homes and taking into account the sq. footage of their own home. Say your next door neighbor recently sold their home for $115.00 per sq. foot. You may be stuck on the idea that your home is surely nicer and therefore deserves at least $115-$120 per sq. foot. But in today’s market, what is considerably more important than price per sq. foot is the overall price and deal on your home.
Whether you realize it or not, where you set the price on your home limits the number of potential buyers who will be interested. If your home is set at $405,000, you are most likely courting buyers who are looking in the $400,000-$500,000 range. But bear in mind, your home is on the low end of this spectrum. You could have one of the lesser desired homes in this price range! If you decided to instead price it at $399,000, smart buyers will realize that it is a killer deal – whether they are searching in the $300,000-$400,000 or the $400,000-$500,000 range.
If you have already listed your home and it has been sitting on the market for more than 60 days, this is a good indicator that your asking price is too high. And while no seller really wants to reduce their asking price, if you want to sell in this market, it can be a necessary action. In fact, many people with homes on the College Station and Bryan markets already are slashing prices to catch buyers’ attention.
So what kind of reduction should you consider? Sellers naturally want to reduce the list price by as little as possible. But bringing down a $175,000 house by $2,000 is a trinket that will hardly register with most potential buyers. Selling in this market equates to bigger necessary reductions. The current rules of thumb: if you are selling in the $100,000-200,000 range you should consider reducing the list price by $10,000. Selling in the $200,000-350,000 range generally requires a reduction of $25,000 to get noticed. If you are above the $350,000 mark, you will want to consider a reduction of $50,000. And anything above $600,000 could potentially be reduced by up to $100,000.
Though this is not what most sellers wish to hear, and it is not always the case, it is a fact of today’s real estate environment. It boils down to this: a seller does not want to keep chasing the market down, reducing a home’s price little by little and chasing buyers in the process. If you truly wish to sell quickly you must follow this rule. Pricing aggressively will most likely get you more bids, and in the end, this could raise your final price.
Having to price and reduce so aggressively to court buyers isn’t always the case for sellers. But in our current state, it helps to price correctly. If you would like to discuss the pricing or selling of your home, please feel free to contact me. And as always, continue to check back for expert real estate advice!