If you’re thinking about selling your home, here’s something you really need to know. Even though it is still a seller’s market, especially with all the extra baggage buyers are carrying, you shouldn’t pick just any price for your listing.
Leaning on accurate and comprehensive comparative market analysis from your real estate agent is a solid first step in determining the value of your home in the current market, while also considering what work needs to be done in order to make sure your price point is spot on.
Those aiming too high will often have their property sit for a longer stay on the market, enduring regular price reductions until buyers agree on what you’re asking. Those who shoot to low can leave money on the table and not fully maximize their investment.
This is one of the many areas where the value of working with a licensed and high-producing real estate agent who understands the local market is just plain obvious.
Those looking to list in coming weeks and months are already on the clock as the highest sales months — spring and summer — are fading into the third and fourth quarters of 2024, when sales activity slows annually.
Another additional aspect putting pressure on sellers to get their price right is the rising number of price reductions, which local agents have seen more regularly in western Nevada County since early June, as we previously reported.
While the median price of a western Nevada County home sold saw a 5% monthly increase in June at $575,000, the number of price reductions is also on the rise.
While home prices are still appreciating in most areas, they’re climbing at a slower pace because higher mortgage rates are putting a squeeze on buyer demand. At the same time, the supply of homes for sale is growing. That means buyers have more options and your house may not stand out as much, if it’s not priced right.
In fact, recent weeks have resulted in more price reductions than new listings, as was the case in the first week of June, when there were 42 new listings and 64 recorded price reductions. In the seven days since July 4, there have been 48 price reductions and 32 new listings in western Nevada County, according to the Multiple Listing Service.
These factors combined are why the asking price you set for your house is more important today than it has been in recent years. Some sellers are finding that out the hard way. That’s leading to more price reductions. Mike Simonsen, founder and rresident of ALTOS Research, told Keeping Current Matters.
“Looking at the price reductions data set … It all fits in the same pattern of increasing supply and homebuyer demand that is just exhausted by high mortgage rates,” Simonsen said. “As home sellers are faced with less demand than they expected, more of them have to reduce their prices.”
POTENTIAL PRICE PITFALLS
Setting a Price That’s Too High: Some sellers have unrealistic expectations about how much their house is worth. That’s because they base their price on their gut or their bottom line, not the data. An agent will help you base your price on facts, not opinion, so you have a better chance of hitting the mark.
Not Considering What Houses Are Actually Selling for: Without an agent’s help, some sellers may use the wrong comparable sales (comps) in their area and misjudge the market value of their home. An agent has the expertise needed to find true comps. And they’ll use those to give you valuable insights into how to price your house in a way that’s competitive for you and your future buyer.
Overestimating Home Improvements: Sellers who have invested a significant amount of money in home improvements may overestimate how much those upgrades affect their home’s value. While certain improvements can increase a home’s appeal, not all upgrades are going to get a great return on their investment. An agent factors in what you’ve done and what buyers in your area actually want as they set the price.
Ignoring Feedback and Market Response: Some sellers may be resistant to lowering their asking price based on feedback they’re getting in open houses. An agent will remind the seller how important it is to be flexible and respond to market feedback in order to attract qualified buyers. In the end, accurate pricing depends on current market conditions – and only an agent has all the data and information necessary to find the right price for your house. The right agent will use that expertise to develop a pricing strategy that’s based on current market conditions and designed to get your house sold. That way you don’t miss the mark.
BOTTOM LINE
The right asking price is even more important today than it’s been over the last few years. To avoid making a costly mistake, connect with a local real estate agent.
— Keeping Current Matters contributed to this story.
