Deciding on the best listing price for your home is one of the most important and most challenging steps in the selling process. If your home is listed at a price that is above current market value, prospective buyers who would otherwise be candidates to purchase your home, may turn away or lose interest. If you price your home too far below market value, you could ultimately be leaving money on the table by starting too low at the beginning of the negotiations.
Most buyers purchase homes within the fair market range with even more purchasing a home if it is a better price than market value. Pricing your home at market value exposes your home to the greatest percentage of prospective buyers and increases the possibility of a sale.
Figure 1 – Percentage of Buyers by Asking Price
Another critical factor related to the pricing strategy is timing. A property attracts the most attention, excitement and interest when it is first listed on the market. A home that is priced right and well marketed when first listed is positioned to generate the level of interest needed to sell the home for the highest amount possible. Improper pricing at the initial listing misses out on this peak interest period and may result in your property languishing on the market. The result of a languishing home is typically a below market value sale, or no sale at all.