Pricing Your Home Correctly as a Home Seller
The Hudson Valley (and the rest of the country seemingly), is still in a very strong seller's market. What does that mean? Simply put, there are more buyers than there are people selling their home in the Hudson Valley. That drives prices up, which is why we've seen such an increase in homeowner equity over the past 2 years.
How much money you get when you sell your home depends on lots of different factors, but the most important one is the price you list your home at, and there are many different ways agents approach pricing. Some people believe that if you want $500,000 for your home, you should list it at $550,000; they expect to be lowballed so they price high to make up for that. Strategies like these unfortunately don't work as well as intended, mainly because when you price higher than you are worth, you price yourself out of the bracket of people who can afford your house. Additionally, people looking to actually spend $550,000 are going to wonder why you aren't offering what a normal house that sells for 550K offers. Right off the bat, you have shot yourself in the foot and are going to get little traction on your listing.
Another issue with pricing high is that the longer a house stays on the market, the less money you end up getting, even lower than what a homeowner may initially want.
As you can see by the chart, the green columns represent the average days on market and the blue columns represent the list price to sale price ratio. The higher the green bars (the longer a home is on the market) the less money you get compared to what you listed at.
So, what is the correct strategy? Well, after 7 and a half years in this business, I've come to realize that the best strategy is to price a home slightly under what it is worth on the market. Now, that is not saying that I would ever want a homeowner to sell their home for under what it is worth, but instead that they should price it slightly below market value. There's a method to this madness. By pricing competitively, you open yourself up to an extremely strong negotiation standpoint because you will have multiple interested parties in your house.
People looking at 300K houses and who see a house pop on the market for 285K that has all the amenities of a 300K+ house, they're going to be extremely interested and move on it quick. They'll even be willing to pay more than the listing price because they see it as a good deal. A house worth $300,000 that is listed at $285,000 will sell for more than a house worth $300,000 that is listed at $350,000.
Your aim when pricing a house is to set yourself up to get the most action and interest possible, not to try to hope for the best and assume the worst. Aim high, but price (slightly) low, and you'll be set for success.
A quick note on this, is that in a strong seller's market, like we currently are in as of January of 2022, you can be a little bit more lenient on pricing. When in a market like this, you can get away with pricing at or even sometimes (if the cards are right, and ask your Realtor before doing this) slightly above what the house is worth. This will not always be the case, but is something that low inventory and high demand allows for.
As always, if you have any questions or if you want to get a valuation on your home to see what you could get, head on over to RupertoRealEstate.com/Valuation for a free valuation!
Thanks for listening,
Licensed Real Estate Salesperson
The Ally Team at J Philip Real Estate
522 N State Road, Suite 100,
Briarcliff Manor, NY 10510