Pricing Right the First Time: How it Impacts Days on Market

06.15.21 | For Sellers

How to Set the Right Home Price the First Time

Think setting a price for your home is simple? Think again. Whether you settle on a number that’s too high or too low, there could be consequences. That’s why it’s so critical to set the right price the first time around. Here are some tips for ensuring the number you choose is just right—and why it matters…

The Dangers of Pricing Inaccurately

Days on market are really important. The first two weeks after your home is listed is crucial—if it doesn’t sell during this timeframe, buyers will likely begin to think there’s something wrong with it. That’s not always fair, but it is true.

This is the main reason to avoid overpricing your property. It could wind up languishing on the market. On the flipside, underpricing your home could mean you’ll get less money than you deserve. Depending on the market, it could also lead to multiple offers (more on that later).

Your Comparative Market Analysis

Your comparative market analysis (CMA) is a crucial document designed to help you make an informed pricing decision. It contains a wealth of information, including recent sold prices for local homes very similar to yours. Your property’s precise location, number of bed and baths, features, age, renovations—many factors are considered during the search for relevant comparables.

Only a skilled local agent can pull together a truly helpful CMA. Armed with this document, your well-positioned to take the first step towards setting your price.

Factoring in Marketing Conditions

Of course, current market conditions always play a role in what constitutes the ideal price. Your comparative market analysis can tell you a lot, but only an experienced local agent knows how shifts and trends can impact your sale.

In a buyer’s market, you’ll likely want to set a number that’s close to the last available comparable price. In a seller’s market, you can likely get away with adding around 10 per cent to that most recent price for a similar home in your CMA.

Considering Your Goals

Of course, your needs and selling goals are an important piece of the pricing puzzle. For example, if you really want to generate multiple offers in a hot market, your agent may suggest pricing your home slightly under market value. Of course, this strategy can come with its own risks—so make sure you discuss the pros and cons.

The point is, an experienced agent will ensure that your needs are front and centre. Make sure you clearly communicate them to the professional you’re working with.

If Your Home Doesn’t Sell…

There are many reasons why a home may not generate any offers, and one of the most common is an artificially high price. Unfortunately, after a certain number of days on market, you may have no choice but to lower it. Your agent can help you determine when that should happen—and how much your price should drop.

This process is strategic, and it takes the expertise of a professional. Your agent may look at things like pending local sales that have price reductions. Another option is to take your home off the market and relist, in which case its history won’t be readily apparent (though an agent can find it if they want to).

The Power of Pricing

Needless to say, it’s crucial to choose the right number the first time around. Luckily, working with the right agent can help ensure that your listing price is accurate—and carefully selected to secure the best result possible!

Interested in learning how we can help you sell your home?

Reach out today to set up a consultation.

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