How to Price Your Home Right: Avoid These Costly Mistakes!

Pricing your home correctly is one of the most crucial steps in the selling process. Set the price too high, and your home could sit on the market for months. Set it too low, and you might leave thousands of dollars on the table.

The good news? You can avoid these common pricing mistakes by understanding market trends and setting a competitive price from the start. Whether you’re selling for the first time or struggling to attract offers, this guide will help you navigate the pricing process with confidence.

Many homeowners believe their home is unique and deserving of a premium price. While your home holds sentimental value, buyers view homes objectively. They compare similar properties, searching for the best value. Pricing your home strategically ensures it stands out in a competitive market without deterring potential buyers.

You might think, “I’ll price my home a little higher to leave room for negotiation.” Or perhaps you’re counting on a buyer who will fall in love and pay your asking price. However, overpricing often leads to your home being overlooked. Buyers compare homes daily, and if your price is too high compared to similar properties, they’ll move on. Even if a buyer agrees to an inflated price, the home may not appraise at that value. If the appraisal comes in lower, the deal could fall apart or force you to renegotiate.

Instead of overpricing and chasing the market down, set a competitive price that attracts serious buyers from day one. Momentum is key. The first few weeks on the market generate the most interest from serious buyers who are ready to move. These buyers are pre-approved and working with real estate agents, actively searching for a home like yours. If your home sits on the market too long, buyers may assume something is wrong with it. Even if there isn’t, prolonged market time can lead to fewer offers and lower selling prices.

One way to assess your pricing strategy is by tracking the median Days on Market (DOM) in your area. If similar homes are selling within 15-30 days and your home remains unsold beyond that timeframe, it may be overpriced.

Some sellers intentionally price their homes below market value to spark a bidding war. In a strong seller’s market, where demand is high, this strategy can work. However, if there aren’t enough buyers competing, your home may simply sell for the low list price, leaving money on the table.

The best approach? Price your home at fair market value to attract serious buyers without unnecessary risks.

Market conditions play a major role in pricing. Here’s how to assess your market:

• Buyer’s Market: More homes than buyers (typically over six months of inventory), leading to longer selling times and more buyer leverage.

• Seller’s Market: Fewer homes than buyers (less than four months of inventory), resulting in competitive bidding and faster sales.

• Neutral Market: Balanced supply and demand (four to six months of inventory), where pricing realistically is crucial.

So, how do you determine the right price? A Comparative Market Analysis (CMA) is the best tool. A CMA is a professional report prepared by a real estate agent, comparing your home to recently sold, active, and under-contract properties in your area.

Setting the right price is key to selling your home quickly and for top dollar. By understanding market conditions, avoiding pricing mistakes, and utilizing a CMA, you can confidently price your home to attract serious buyers.