Pricing when selling your home in Weston, Wellesley, or Wayland, MA, may be one of the most complicated aspects of real estate. The goal is to have your listing price approximate your selling price. I like to refer to it as “right pricing.” And the million dollar question is how do you figure out the “right price?” I know this isn’t a very satisfying answer, but it’s an analysis based on previous sales (comparatives), strengths and weaknesses of the property, its condition, location, the state of the market as well as intuition and gut feel about the market’s reaction to it…a little of this and a little of that. As we real estate agents like to say, it’s an art and not a science.
When you “right price” your home, you’ll know. Buyers will act within a certain time frame and behave in a particular way. On the time frame aspect, the serious buyers, who are ready, willing and able to buy, will come through your door during the first few days your home is on the market. They are the ones who are sitting at their computers checking MLS every hour to see if any new listings have come on the market in their price range. If the price seems reasonable from their review of the property on MLS, they will schedule a time to come see it. In terms of their behavior, when they come to the house, their reaction will be, “Wow, at this price, you get updated kitchen and baths, four nice-sized bedrooms, and a great location.” In other words, they will overlook any of the negatives or not-so-great aspects of the house – the lack of a garage, small yard and only one full bathroom, for example – and focus on the positives because the price seems reasonable to them. It’s a “value” shall we say. And then not wanting to miss the opportunity to buy your property, and because they have likely lost others during their search, they will put in a strong offer without delay. Mission accomplished!
So…. in order to help you get to this point, here are some To Do’s and Not To Do’s to keep in mind and guide you when determining at what price to list your home – and sell it quickly:
Do Be Objective and Realistic. This is probably one of the most important and yet hardest things to do. If possible, be as objective as you can be about your home. See it through the eyes of a potential buyer and not yours as the owner, who has raised three children there. All homes have strengths and weaknesses – yours included – even though you love it so much and have built many happy memories there. Being objective about your house – and its plusses and minuses – will help you be realistic about the price. And on a related note, don’t let the selling price of your neighbor’s house influence you. Unfortunately your home is not the exact same as your neighbor’s home in every single way – square footage, lot utility, condition, timing of the listing, motivation of the seller – and so you can’t just use that price for your house. How often do you hear that your next door neighbor’s house, which is similar to yours, sold 9 months ago for $1,000,000, and so your house should sell for the same? I wish it were that easy….
Don’t Just Use a Calculation. Two points on this. First, the correct listing/selling price is not based upon a set formula or calculation. As I mentioned above, it’s a mixture of factors that are ever changing and can be difficult to interpret. Even more than this, the approach that … the price you paid for the house + what you put into the house since that time = the price you “need” to get … has no bearing on the selling price of your home. You as the seller will determine the listing price of your home, but the market determines its selling price.
Do Factor in Condition. You have a leg up if your home is new or recently renovated. Buyers today pay a premium for homes in which the condition is move-right-in. If the property is dated and hasn’t been updated in 20 years, especially the kitchen and baths, the buyers will significantly discount your home. It means that they will have to do the renovations to your home, and they end up inflating the renovation costs and add an aggravation factor to the equation. Note that you can do things to remedy the dated aspects – fresh, neutral paint colors, staging some of the rooms – but more on that in another post.
Don’t Overanalyze. You could spend months analyzing past sales and relating these to your home, and you could get opinions from 10 different real estate agents about what is the right listing price for your home. You could do these things until you’re blue in the face. But the reality is that you won’t know the market reaction to the price until your house is listed on the market. Only then can you gauge the reaction of the buyers to the price. We all have our estimates, opinions and predictions, but we don’t know for certain until it’s live on MLS.
Do “Right Price” Your House. Above we described how buyers respond when you “right price” your house. But some sellers end up overpricing their homes because they want to leave negotiating room for themselves or because they have a tough time being objective about the pricing and value of their homes. What I will say is that if you do end up overpricing your property, buyers will focus on its negatives instead of its positives. Using the example before, their reaction will be, “Bummer, at this price, I have to deal with having no garage, a small yard and only one full bath. Thanks, but No Thanks.” They lose sight of the positives and focus on the negatives because the price is too high, and they don’t see the value. And then what happens? The property sits and accrues days on the market, which results in buyers discounting the price. It may sound counter-intuitive, but if you overprice your home, you will likely get a lower selling price than if you had “right priced” it from the onset. I have seen it happen time and time again.
Rest assured – I guess you could say – because the market will tell you if you’ve chosen the right price for your property. If you’re having multiple first and second showings just after listing your home, you are in the correct pricing ball park. If you’re having first showings but no second showings, your house is overpriced. And if you’re barely having any showings whatsoever, your house is very overpriced. If the latter is the case, then you’ll need to act quickly to reduce the price and rectify the situation because prolonged days on the market are your enemy when selling your home….
On that light note 😉, what are your thoughts on home pricing when selling your home? Have you followed some of these to do’s and not to do’s? If so, did they help? And if not, do you have others that helped you? I can’t wait to hear….
For more information on this or about the real estate market in Weston, Wellesley, Wayland and the surrounding towns or if you are considering selling your home, please contact me, Lisa Curlett (www.lisacurlett.com, 781-267-2844 or lisa.curlett@compass.com), to answer any questions or for a complimentary home appraisal.