What is the Best Pricing Strategy to Sell Your Home?

The goal is to get your home sold for the most money in the shortest amount of time.  What is most likely to get you the result you want?

A Real Estate Salesperson will analyze all homes similar to yours, sold recently and sold close to where your home is located, referred to as “comps”, to come up with a reasonable price range for which you can expect your home to sell. 

Set Price at Fair Market Value
Just prior to listing, further adjustments are made for location, condition and competition to determine the fair market value price the home should sell for.
Pricing your home competitively will attract the maximum number of buyers looking for a home with those particular features in a certain neighbourhood.  The “comps” support your asking price, so interested prospective buyers see the value and tend to make reasonable offers.

Set Price Below Fair Market Value
The goal here is to make your home appear more attractive than other similar properties.   It can create a sense of urgency among buyers and may lead to more than one offer: a bidding war.  A date may be set for offers to be reviewed a few days later, encouraging all interested parties to decide right away.  This could lead to a higher offer price than fair market value, especially when there are not a lot of homes available to choose from.

However, there is no guarantee that multiple offers will be submitted or that the highest one will be accepted by the seller.  Some interested buyers are concerned about overpaying and refuse to participate in a bidding war and will continue to search for a different home to buy.

Set Price Above Fair Market Value
Some sellers believe, against all reason, that their home is worth more than what the “comps” show.  Typically, this results in fewer showings and no offers.  The home sits on the market for a while and becomes stale.  The price may have to be reduced multiple times before an offer is received.  Having to keep the home “show ready” for an extended period of time is stressful on the seller.

Potential buyers have more negotiating power against a seller who needs to sell.  Ultimately, the final selling price may be less than what it would have been if it was priced fairly to begin with!