Knowing When You Should Raise the Sale Price of Your Home
If you're selling a home and are unhappy with the sale price your real estate agent established, there are several things you should consider.
You might have come to that conclusion because an offer arrived very quickly. It's natural to wonder if an offer that arrives within days of listing means the home was priced too low, but it's more likely that a fast offer means the home was priced perfectly.
While it's possible a home could be priced incorrectly, or 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.
Price in the Correct 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 are certain circumstances in which it's not selling because 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 and little or no inventory near that point. For purposes of illustration, let's say that dividing line is $499,000, and most of the homes that sell in that particular area below that price point are also selling below $465,000.
The home could 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 it's priced on the cusp of $499,000. If that home is easily worth $499,000, pricing it at $505,000 might pull in a different type of home buyer—one with an over-$500,000 mindset.
Another situation in which you might want to raise your price is when you start seeing those multiple offers—and each one is more than list 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 from which 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.
Pay Attention to Feedback
An important tool for gauging whether your sale price is correct is reaction from the marketplace. 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 and you definitely should not raise the asking price further.
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.