10 Tips for Pricing Your House to Sell
Selling your house but not sure how high or low your price should be? Check out these pricing strategies!
By Emily Southey | 7 minute read
You’re preparing to sell your home but are having trouble deciding on a listing price. Sound familiar? Price is one of the most important factors when selling a home. Price it too high and you risk turning off prospective buyers, but price it too low and you risk accepting an offer far below what your home is worth. Luckily, how to price your house to sell is exactly what we’re discussing today. Continue reading to discover 10 tips to price your home to sell.
Before we delve into our expert tips for pricing your home to sell, it’s important to understand the three main strategies when it comes to pricing. You’ll find a breakdown of each below.
Price your home below market value
The first pricing strategy is to price your home below market value and hope for a bidding war that drives the price up. This strategy is typically most effective when demand outpaces supply or there is an undersupply of your specific type of property. The most common homes that see success with this strategy are those in highly desirable neighbourhoods, those with character or historic details, or those in well-regarded school districts. For this strategy to be successful, the seller must set an offer review date or “bidding war date,” which is typically within a week of the house being listed. While the hope is that multiple buyers will make offers on the home, this isn’t guaranteed, which makes pricing below market value risky.
“The first step in pricing your house to sell is to determine the value of your home. One of the quickest, most convenient (not to mention, free) ways of doing that is to use a home value estimator online. Try Wahi’s Bestimator tool for a free estimate.”
Price your home above market value
The second pricing strategy is to price your home above market value in the hopes that someone will buy it. This is a common strategy in all types of markets with both houses and condos. Sometimes it’s a conscious strategy on the part of the seller and their realtor while other times it is done at the insistence of the seller. The reality of this strategy is that pricing a home above market value can alienate certain buyers. For buyers who don’t want the hassle of negotiating, they won’t even entertain the idea of submitting an offer on a home priced above market value. In addition, the higher you price your property, the higher the odds that it will sit on the market longer. Listings go stale quickly. In fact, most realtors acknowledge that the buzz around a property dies within a few weeks of it hitting the market. That said, you might get lucky and find a buyer who is willing to pay your listing price.
Price your home at market value
The third and final pricing strategy you see in real estate is pricing a home at market value. This is often the least risky pricing strategy, which also makes it the most popular. Pricing your home at market value increases your chances of selling it quickly and at a satisfactory price. Of course, this strategy hinges on the seller having a solid idea of the market value of their home. A comparative market analysis is crucial here. If this is something you are hesitant to tackle on your own, hire a realtor to help you. An effective comparative market analysis should weigh metrics like the recent sales of similar homes in your neighbourhood, properties currently on the market (and for how long), the current housing market, and the specific pros and cons of your home.
Ten Tips for Pricing Your House to Sell
Now that you understand the three main real estate pricing strategies, it’s time to discover our top 10 tips for pricing your home to sell.
1. Start with an online home value estimate
The first step in pricing your house to sell is to determine the value of your home. One of the quickest, most convenient (not to mention, free) ways of doing that is to use a home value estimator online. Try Wahi’s
Bestimator tool for a free estimate. You will be required to enter some basic information about your home, including its size and address, and within a matter of minutes, you’ll receive your free estimate. This is a great jumping-off point to help you determine the right listing price for your home.
2. Negotiate the best offer
Negotiations are a key component of any real estate transaction and are especially important when it comes to price. To get the most money for your home, don’t hesitate to negotiate. If the thought of entering into a negotiation makes your stomach turn, be sure to hire a realtor who can negotiate on your behalf.
3. Avoid overpricing
Generally speaking, overpricing your home is riskier than underpricing it. Homes that are overpriced risk alienating a huge percentage of buyers. This could translate to fewer offers (or no offers at all). The longer your home sits on the market, the less desirable it will be. And if you end up lowering your price in the future, prospective buyers will be able to see this, which could give them a leg up in negotiations. That’s why if you’re debating between pricing your home above or at market value, we recommend sticking closer to market value.
4. Don’t overvalue updates or renovations
Most sellers think that any and all renovations will add value to their property, but this isn’t necessarily the case. In fact, there are many types of renovations that won’t add much value to your property at all. Overvaluing renovations is one of the main factors that lead to overpriced homes. If you aren’t sure what your kitchen upgrade, new windows, or updated ensuite bathroom are worth, hire a realtor, contractor, or appraiser to offer their professional opinion.
5. Focus on logic not emotions
Selling a home is emotional, and you’re expected to be overwhelmed by emotion at various points in the selling process. But when it comes to pricing, do your best to prioritize logic over emotions. It’s normal to have a sentimental attachment to your home, but you shouldn’t let the good memories you’ve had there cloud your judgment when it comes to the listing price. Listen to your realtor’s advice and choose a price you think is fair (even if it’s not as high as you would like).
6. Take stock of the potential problems with your home
If you’ve lived in your home a long time, looking at it through an objective lens can be difficult. But it’s important when pricing your home. Consider everything from the location (do you have noisy neighbours or are you located under a flight path) to the house itself (are there any plumbing or HVAC issues or strong odours from pets or tobacco?).
7. Understand the market
Understanding the real estate market is crucial when it comes to home pricing. This is where a comparative market analysis comes in. Work with your realtor to develop a detailed market analysis that gives you a solid idea of the market value of your home.
8. Determine how you’re going to sell
Before you set a specific listing price, determine which pricing strategy you’re going to use. As mentioned above, there are three main strategies — pricing above market value, below market value, or at market value. You should base this decision on your specific home and general market conditions.
9. Price your home to come up in online searches
Now that many buyers start the homebuying process online, pricing your home to sell also involves pricing it in a way that it will show up in online searches. For example, if you list your home at $710,000, you run the risk of missing out on all the people who set their price limit to $700,000. Before setting the listing price, look at various online real estate marketplaces to see their pricing categories and price it accordingly. For example, if one website has categories like $200,000-$299,000 or $300,000-$399,000, then it might be a smart decision to price your home at $399,000 instead of $405,000.
10. Think like a buyer
When pricing a home to sell, put yourself in the buyer’s shoes. If you were a buyer and found a home you love but it was priced way above market value, would it frustrate you to the point of walking away? When pricing your home, do your best to consider the kinds of thoughts a buyer would have when they read the listing price.
Frequently Asked Questions
How do I maximize the selling price of my home?
There are many things sellers can do to increase the value (and therefore the selling price) of their homes. For example, they can have their house professionally staged, complete minor repairs, boost curb appeal by sprucing up the exterior, and repaint.
How do realtors determine how to price a home?
Realtors conduct in-depth comparative market analyses, which give them insight into the market value of your home and current market conditions. From there, they can offer their professional opinion on the best price for your home.
What are the biggest selling points of a house?
Location, size, and certain rooms (kitchens, bathrooms, and primary bedrooms) are usually the biggest selling points of a house.
How do I determine the listing price?
The best way to determine the listing price of your home is to work with a realtor who can do a comparative market analysis and advise you on the most effective pricing strategy for your home.