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Tips About How to Strategically Price Your Home
May 30, 2018 | Katy Ryan
Pricing your home properly is critical in this market if you want to sell it for maximum profit. Here is a strategy we use to achieve that.
Today I want to provide you with some professional tips on how to properly price your home in our market.
As a seller, the one thing you should be concerned about is your home’s market value. In every different market, there is a different pricing strategy that needs to be used. In a seller’s market, the one that we commonly use is called the pricing model index (PMI). This is similar to when a company puts out a new consumer product—they will look at different pricing models, factoring in high versus low prices, and will probably settle somewhere in between. This way, you will get the most product sold and net the company the most profit possible.
If you price a home too high, buyers will know about it.
There are a lot of key factors that go into this. Suppose a property is priced at market value around $225,000. It could sell for a little bit more or less than that, depending on where you set the list price. We will look at the showing reports to determine what buyer behavior is like, as well as observe trends in demand for that price range.
If $250,000 is the highest market value that you can get for your home, you might list a little lower than desired. Should you list the home at $215,000 or $220,000, you can drive up the price with multiple offer situations by inciting competition between buyers.
If you price a home too high, buyers will know about it. If your initial list price is too high, it could cause the home to stagnate on the market and force you to reduce the list price in order to compensate. That’s the opposite of your goal.
If you have any questions about the PMI strategy for home pricing, please feel free to reach out to me. I would love to discuss it in more detail and figure out how it could be implemented with your home sale.