Pricing a Home to Sell
Setting a list price for your home can be both complex and emotional. It can also be one of the most important things to get right when you’re trying to sell your home. The list price often plays a large role in terms of what the house ends up selling for, the number of parties who express interest in making an offer, and the length of time it takes to sell.
Generally speaking, a property that is priced low will receive more interest than a property that is priced high. With that in mind, over the past few years the majority of properties to hit the market in Redwood City have sold above the list price. Because people who are accustomed to the local market are used to seeing this, sellers will intentionally list their home at a price lower than they expect it to sell for. As we near the close of our third year of price increases and head into the holiday season, we may start to see things change.
When it comes to pricing strategy we see properties priced below, right around, and above what they are expected to sell for. Let’s go over some of the pros and cons of each.
Listing higher than the anticipated sale price
When a house is listed higher than the anticipated sale price, it will often sit on the market longer. We're in a sellers' market where many properties sell after 1-2 weeks. If a property sits longer than that it can make buyers wonder if there is something wrong with the house. The potential upside is that if you can attract buyers at a higher price point, your home may sell for more. On the other hand, if its appears unattractive to buyers it could mean the property sells for even less than if it were priced more aggressively.
Listing at the anticipated sale price
Some buyers will appreciate a realistic list price that is in that sweet spot above what will incite a bidding war, but within what’s reasonable for the home and the neighborhood. Homes listed around the anticipated sale price may sell quickly. The drawback here is that compared to homes listed below market value these may not attract as many offers.
Listing lower than the anticipated sale price
Everyone is looking for a deal and the benefit to this strategy is that you will attract a lot of interest from real buyers, people who have just started looking, and people who are looking for a steal. Homes priced lower than the sale price often move quickly and attract a high number of offers. The downside is that you may end up with low quality offers and not get to the anticipated sales price. This can happen when well-versed buyers don't want to deal with a competitive bidding war, which can leave you with those who are looking for a deal or don't know the market.