When to Raise the Sale Price of Your Home
When you're selling your home, ideally, you and your agent will find the perfect price for your listing. But there are times where you may want to consider raising the price after you've already put your home on the market.
It's important not to react too quickly or change your price frequently, though. Let's look at a few factors that might help you make an informed decision.
Can You Price a Home Too Low?
If you've received an offer almost immediately after listing your home, you might wonder if you aimed too low with your price. It's natural to wonder, but it's more likely that a fast offer means the home was priced perfectly.
While it's possible a home could be priced below market value, the market would likely make you aware of the mispricing in the form of multiple offers, including ones above the asking price. So don't be afraid: The chances of selling your home for a good deal less than it's worth are very low.
You Priced It Too Low for the Market
If your home isn't selling or even attracting much showing activity, you might think it's because the price is too high. That's a logical—and probably correct—conclusion but there is also a chance the price is too low.
Take a home, for example, that is priced at a particular threshold, just below a point where there is a dividing line for search parameters with little or no inventory around that threshold. For purposes of illustration, let's say that the dividing line is $499,000, and most of the homes in that area that sell below that price point are actually selling below $465,000. Let's also say this home is priced at $495,000, and it's not getting many looks.
It may be priced in the wrong market. There might not be any homes or only a small sample of homes for sale between $465,000 and $499,000 at the moment. Buyers who are looking at homes over $500,000 might never see this home. If that home is easily worth $495,000, pricing it at $505,000 might pull in a different type of home buyer—one with an over-$500,000 mindset.
You Get Multiple Offers
On the other hand, if you're getting flooded with several offers—and each one is more than list price, this could also be a good chance to rethink your price. Rather than immediately making counteroffers, you could raise the sales price and see which buyer is willing to go the highest.
Establishing a higher price point for buyers to begin making purchase offers might also weed out those buyers who were never serious about your home. It is not uncommon for buyers to make an offer just to try to tie down the home—maybe without viewing it at all—to keep their options open until they've found the house they truly want to buy.
Your Home Has Better Features
If there weren't many comparable sales on the market when you first listed, you might not have had much for comparison. Since then, you might have had a chance to compare your features to other homes in your price range, only to find you have more to offer. If those features are significant, then a price bump might be in order.
The Market Changed—Or Your Home Did
Maybe you originally listed your home in the off-season, and now it's prime time for home buying. Or perhaps there has been a surge of interest in your neighborhood. In either case, you might be in a good position to raise your price. The housing market isn't static, and your agent should have a good feel for the activity in the area and the prices of comparable sales.
You also might have made a major upgrade since you first listed your home. Certain upgrades can add significant value to your home, so talk with your agent about how to upgrade your listing in light of these changes.
Pay Attention to Feedback Before You Raise Your Price
Watching how the market reacts is provides you with an important tool for gauging whether your sale price is correct. Analyze the activity that's going on and pay attention to buyer feedback.
If you've gotten no offers after three or four weeks of showings and the feedback is telling you cost was an important factor, your home could, in fact, be priced too high. You definitely should not raise the asking price further, or you risk pricing yourself out of the market entirely.
If the feedback is focused on other factors, such as the layout or location of your home, you shouldn't yet be concerned about changing the price.