Probably the most important part of selling a house is in the pricing. It doesn't matter how well a home is staged or marketed, if the price is too high, it's not going to sell. Compounding this problem is the length of time it remains on the market. After about 20 days, it's not a fresh listing and the interest begins to decline. The longer it sits, and then people start wondering if there is something wrong with the property.
There is a science to pricing a house to sell and surprisingly, different agents approach the task in a number of ways. These are some of the basic components of pricing a home, which generally come into play. However, some agents simply know their market and they have a gut feeling about whether a price is within range or not, and many times they are right on the money.
Start With a Comparative Analysis
Pull local listings from the last six months that align with your home's features, age, property and house size. Compare the selling prices and the differences in the various properties. For example is the home located next to a busy road, does it sit under hydro lines, or is it well-maintained? A similar size of home is a factor, but is not always the main consideration when determining a selling price. A smaller, well-maintained home with road appeal may sell at a higher price than a poorly maintained, older home on a bigger property.
Next, compare the asking prices with similar homes that have sold to see how well they were priced. Also check to see the average number of days on the market.
View Expired Listings
Look up any expired or pulled listings to see if there was a common reason that they did not sell. It may have something to do with the location, or an undesirable development that is planned in the area. It may have even had something to do with the broker and their particular marketing techniques.
Know your Competition
Tour some of the comparable listings for sale in your area to determine any edge they may have over your home. Compare the appearance, features and overall sense that you get when you enter the home. If you can't make the necessary changes in your home to compete, you may want to adjust your price.
The ultimate price is going to be determined by the condition of the market. In a seller's market you may be able to ask a slightly higher price than in a buyer's market. Here you want to avoid turning away prospective customers because of an unrealistic asking price. In a seller's market, where inventory is increasingly scarce, you may be able to get away with adding an additional 10 percent above the last comparable sale.
In a more balanced market, your price may be set only a percent or two above the last comparable sale, depending on how long ago it was. Keep in mind, if you price lower, you increase your chances of receiving multiple bids where the final selling price may end up at market or higher than market value.