Proper Pricing

Why Pricing Correctly at the Beginning is So Critical

One of the greatest challenges of our profession is pricing homes correctly. Obviously, as a listing agent, our highest priority is getting you, the seller, the highest possible sales price. However, one must be careful not to let that desire cloud one's judgment as to what is reasonable and realistic in the circumstances. Here are some reasons why it is so critical to price a home properly from the beginning of a listing.

Most of Your Showings will Occur in the First Three Weeks Your Home is Listed
Per the National Association of Realtors (NAR), in a typical listing situation the number of showings per week increases during the first, second and third weeks after a home is listed for sale (peaking during the third week). Starting in the fourth week, the showings begin to decrease and continue to do so until approximately the eighth week, at which time they level off at the lowest level. Further, a new listing is (1) "exciting" (that is, there is an emotional advantage to you as a seller at the beginning of the listing period; buyers have an elevated sense of urgency and expectation at this time), (2) shown more, and (3) generally sells for a higher price than older listings. Later, fair or not, prospective buyers begin to wonder why your home hasn't already been sold.

Homes Sell Closer to their Asking Price During the First Few Weeks
Based upon another study performed by the NAR, properly priced homes sell faster and for more money during the first weeks of the listing period. Specifically, here is what that study showed:

As you can see, it is very important to price your home properly from the very beginning. Most motivated buyers - and these are the people you are trying to attract - follow the market closely and typically look at new listings not long after they have been listed (this is particularly true during periods of rapid price appreciation, which is what we have experienced in this market for a number of years). If you overprice your home, you will likely miss out on this "first wave" of potential buyers, which is exactly the group that is most likely to pay the highest possible price for your home.