How to Price Your Home to Sell in a Softening Market
It can be hard to predict the real estate market. What was a red-hot seller’s market a few months ago has started to shift back to a more normal market. If you’ve been contemplating selling your home to take advantage of the huge increase in property values Pittsburgh experienced over the past two years, you might be disappointed to realize the days of sky-high prices and multiple offers are waning. In a declining market, like the one we face today, pricing your home is critical to successfully selling your home in a timely manner.
The first step in adjusting to the market is realizing that it’s changed and identifying how that change has impacted your goals. Earlier this year, many sellers would list their home with a high price at first to “test the market”, and aggressive buyers were willing to pay. Mortgage rates are continuing to climb and have contributed to a decrease in buyer interest for overpriced homes. The higher mortgage rates means less home buyers can afford to buy. This means buyers are back to being more cautious and are committed to getting a good deal up front.
How to know how much your home worth?
There are some hard truths when it comes to the value of your home in any market:
· What you paid for your home doesn’t affect its value.
· Your asking price does not affect its value.
· What it might have sold for 2 months ago does not affect its value today.
The value of your home is determined by what a qualified buyer in today’s market is willing to pay for it, comparing it to others in the community that have recently sold.
How, then, do you find out what buyers are willing to pay? Regardless of whether we’re in an accelerating or declining market- your pricing strategy should be the same in that you should try to price your home ahead of the market. How do you determine what is overpriced and what is underpriced? This is where working with an experienced trusted real estate agent is so important. It’s all about finding a balance that will attract buyers, while still netting you a favorable final sale price.
1. Start by finding real estate comparables- or comps. These will help you determine an approximate value of what your home should be worth. Your agent should have this data readily available.
2. Then, you factor in the declining market- which means you’ll want to price your home slightly below that of the comparables in your area. This strategy will help bring attention to your home- buyers will see your home and the asking price and recognize that it’s a fair price in today’s market. While you could start with a higher price and try lowering it after the fact, a house will draw the most attention when it’s new on the market.
Selling today might seem like a challenge, but that’s only because the market conditions change- and that’s perfectly normal. Bear in mind that sellers can ask whatever they want for their homes. That doesn’t mean they will get it. The right price for your home from the start will help you attract the right buyers and enable you to sell your home quickly, even in an ever changing market.