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Pricing Your Home to Sell by Using Smart Strategies
Pricing your home to sell isn’t as simple as adding a markup to what you originally paid. This approach could cost you thousands of dollars or prevent your home from selling altogether.
Setting the right price requires careful consideration of multiple factors.
You need to think strategically when selling your home. A well-priced house attracts more potential buyers and can lead to a faster sale.
Researching and setting the right price from the beginning will help you avoid costly mistakes and frustration during the selling process.
Home Value Guide for Pricing Your Home to Sell
Knowing how much each square foot is worth helps you set a fair price when selling your home. Many top real estate agents use this calculation as a starting point.
To figure this out, divide the sale prices of similar homes by their square footage.
But be careful – don’t rely only on price per square foot!
Your experienced real estate agent will explain why your home might be worth more or less per square foot based on:
- Location within your neighborhood
- Home condition and updates
- Square foot range that an appraiser for a bank would use
- Special features like views or pool
We can help you understand your price per square foot and the real home value based on careful research conducted through real estate multiple listing service. (MLS)
Do not rely on ZILLOW or Redfin or Realtor.com for pricing. It can be off by as much as 30%.
- Be wary of agents attempting to “buy” your listing. An agent practicing this technique will often sweet-talk you with their elevated price recommendation and a discounted commission waiting only a few weeks to insist on a price reduction.
- Be mindful: a home on the market for extended periods becomes less saleable to buyers and agents. People begin to wonder if there are significant defects with the property or whether the seller is truly motivated.
Some agents suggest underpricing your home hoping to start bidding wars among hungry home buyers. While this technique may work to an extent in some markets, it is often a wiser decision to market yours at the market value.
Then, track the number of showings. If your home is not getting three to five showings per week, then you need to adjust the price.
What is a Showing?
A showing is a buyer with an agent. The more showings of your home the better.
Square Footage Range is Best When Pricing Your Home to Sell
Square Footage Range and Location are the key. Appraisers establish home values by taking a square footage range of the subject property. For example, if a property has 1500 square feet.
They would look for recent sales in the same neighborhood or condominium complex between 1,400 to 1,600 square feet in the past 3 to 6 months to establish the value.
As Real Estate professionals we do the same thing.
Understanding Southern California Market Trends
The Los Angeles and Orange County housing markets are changes constantly. Here’s what to watch:
| Market Factor | What It Means For You |
|---|---|
| Days on market | How quickly homes sell |
| Inventory levels | Number of competing homes |
| Seasonal timing | Spring/summer often sees more buyers |
| Price direction | Are values rising or falling? |
Ask us, your real estate agents, how many offers sellers typically receive in your city. This gives you clues about whether you’re in a buyer’s or seller’s market.
Market conditions affect your pricing strategy significantly. If homes are selling quickly with multiple offers, you might price at market value. If sales are slow, you might need to price slightly below competitors to attract attention.
How quickly are homes selling in your area?
Are prices increasing or decreasing? Are you in prime selling season (typically during spring April to August) or attempting to sell in the winter season?
How many offers are sellers typically receiving once on the market? These are only a few of the many questions that your agent can help answer.
Addressing Home Problems Before Selling
Every home has some issues. How you handle them depends on current market conditions:
In a seller’s market:
- You may not need to fix minor problems
- Buyers compete even for homes needing work
- Save your money on cosmetic issues
In a buyer’s market:
- Fix as many problems as you can afford
- Price reflects remaining issues
- Buyers have choices and will compare the condition
Consider getting a pre-listing home inspection.
This helps you:
- Discover problems before buyers do
- Make repairs on your timeline
- Price accurately based on condition
Remember that perfect homes don’t exist, but homes in better condition typically command higher prices.
Making Your Home More Attractive to Buyers
To attract a strong buyer pool, consider these strategies:
- Boost your curb appeal with fresh landscaping
- Consider professional staging to showcase your space
- Offer incentives like a home warranty
- Be flexible with closing dates
- Host an inviting open house
- Consider helping with buyer closing costs
Remember that your home must appeal to three different audiences:
- Real estate agents who bring potential buyers
- Buyers who compare your home to others
- Appraisers who determine value for lenders
Good listing photos and proper staging help create positive first impressions. Your top real estate agent can advise on which improvements will bring the best return on investment.
When preparing for comparative market analysis, remove personal items so buyers can imagine themselves living there. This helps them connect emotionally with your property, potentially leading to better offers.
Frequently Asked Questions
Finding the Right Price for a Quick Home Sale
Setting a price that attracts buyers quickly means doing your homework. Look at similar homes that sold recently in your area.
Price your home 5-10% below market value if you need to sell fast. Make sure your home looks its best before listing.
A clean, well-staged home can sell for more money. Fix small issues like leaky faucets or chipped paint. Consider a pre-listing inspection to find problems before buyers do.
- Check online listings daily to see what’s selling
- Talk to neighbors who sold recently
- Be ready to lower your price if you don’t get offers
How Realtors Figure Out Your Home’s Worth
Real estate agents use a Comparative Market Analysis (CMA) to price homes. They look at similar homes that sold in your area in the last 3-6 months. They consider:
| Factor | How It Affects Value |
|---|---|
| Square footage | Larger homes typically cost more |
| Lot size | Bigger lots usually add value |
| Condition | Updated homes command higher prices |
| Location | Neighborhood affects price significantly |
Realtors also factor in current market trends. In a seller’s market with low inventory, you might price higher. In a buyer’s market with lots of homes for sale, you might need to price lower.
Setting Competitive Prices in California’s Market
California’s real estate market varies greatly by region. In hot markets like Long Beach or Los Angeles, homes often sell above the asking price.
Prices are slightly below similar homes to create a bidding war. For example, if comparable homes sell for $800,000, list at $775,000 to attract multiple offers.
Consider timing too. Spring and early summer are typically the best times to sell in California. During these seasons, you might be able to set a higher price.
Adjusting Your Price Based on Neighborhood Sales
Recent sales matter most when pricing your home. Focus on homes that sold in the last 30-60 days. Older sales may not reflect current market conditions.
Make honest adjustments for differences between your home and recent sales:
- Add value for features your home has that others don’t
- Subtract value for features your home lacks
- Consider $10,000-$15,000 adjustments for each major difference
Watch how long homes stay on the market. If similar homes sell within days, you might price higher. If they sit for weeks, price more conservatively.
Pricing When Selling By Owner vs. Using a Realtor
When selling without a Realtor, For Sale by Owner (FSBO), you save on commission fees. These fees are typically 5-6% of the sale price. Saving on these fees might let you price your home slightly lower while keeping the same profit.
However, FSBO homes often sell for less than agent-listed properties. Studies show FSBO homes sell for about 5.5% less on average.
If you go the FSBO route, make sure to:
- Research prices thoroughly
- Get a professional appraisal ($500-$600)
- Be prepared to negotiate directly with buyers
- Consider offering a buyer’s agent commission (2-3%) to attract more potential buyers
With a Realtor, you’ll pay a fee at the close of escrow and will get expert pricing advice and access to more buyers through the MLS system.
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