5 Pricing Questions All Home Sellers Should Ask Themselves
Pricing your home requires a thoughtful evaluation of your local market, recent home sales in your area, the unbiased value of your home and more. To make sure our sellers set an accurate list price on their home, we ask them to answer the following last minute pricing questions prior to listing.
How does Redfin's estimate of your home's value compare to your price?Go to Redfin.com and type in your address to learn. Nationwide, Redfin's median error rate is less than 6%. In California, it appears to be closer to 2%. If your price is higher than Redfin's home value estimate for your property, carefully consider the questions listed below.
Does your list price match what other, similar homes in your neighborhood are selling for?Do some research to identify what other homes with a similar number of bedrooms, bathrooms and square feet, are selling for in your area. If your home is listed for significantly more money, it may be time to reconsider your price strategy.
Are you pricing to "leave room to negotiate" or afraid of leaving money on the table?A wealth of data shows that pricing above fair market value causes a lower final sales price. Stats show if you price above the market value of your home, you will see a final sales price approximately 4% less than what it otherwise would be. By contrast, if you price low, you are likely to receive multiple offers and a price above asking price.
Is your pricing biased because of your emotional connection to your home?According to national stats, homeowners believe their home is worth an average of 8% more than it actually is. Check out this post to learn more about emotional pricing and how to avoid it.
Will you get more money if you underprice your home or overprice it?Zillow Talk, a book written by Zillow's CEO Spencer Raskoff, suggests that under-pricing yields a higher final sales price due to competition amongst buyers. Raskoff and his data make very clear that you should be much more afraid of overpricing your home than underpricing it. For more information, check out the chapter titled, The Price Is Right in Zillow Talk.
In addition to asking yourself these questions, we also recommend you have the addresses of two or three recent sales in your area that support your price. Make sure you pull recent sold data - not active listings. Buyers will often ask for this data, so you should be prepared with an answer. We can pull it for you.
If you have any questions about pricing your home, don't hesitate to reach out to us! We're happy to help in any way we can.
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