How Do You Know the Right Price to List Your Home?

By Shelby Campbell

With over two and a half decades of unwavering commitment to the mortgage industry, I am your seasoned Mortgage Loan Officer dedicated to helping individuals and families achieve their homeownership dreams.

Why does it matter if I price my home right the first time? The initial list price is one of the most critical factors that can make or break your sale, especially for the first two weeks when you first list your home. Why? Because that’s when buyers and agents are actively looking for opportunities. If your price is right, buyers will be motivated to act quickly.

During this holiday season, sellers are even more motivated. After all, not many people want to list their homes during Thanksgiving or Christmas, so if a house is on the market, it usually means the seller is serious. This can lead to better deals for buyers, but it also means sellers need to be strategic about their pricing.

What actually happens when a home is overpriced? Paul Campbell from Epic Realty mentioned that when buyers see your home and think it’s out of their budget, they might skip over it entirely. This is a missed opportunity for sellers as they may not come back for another look for 30 to 60 days.

Listings that stay on the market for over 30 days also typically sell for 5% to 10% less than the last listed price. And if you start dropping your price after that, then it’s a huge loss for you as a seller.

Pricing is all about buyer perception. If they see a home that’s been sitting for too long, they will assume there’s something wrong with it.

But how can you avoid pricing mistakes? The most sensible thing to do is to work with an agent who knows the market well. For example, in Portland, home values vary from block to block. An expert can help you determine the correct market value for your home and go from there.

Research shows that homes that are priced slightly below market value get about 60% more showings in the first week compared to overpriced listings. Our strategy should be to price your home about 1% to 2% below what your home is worth. This can create excitement and lead to multiple offers, potentially resulting in a sale price higher than your initial listing.

Aside from that, you should also consider the appraisal process. If your buyer is financing the purchase, they’ll need an appraisal. And if the appraisal comes in low, the buyer isn’t obligated to close unless you renegotiate the price. It brings you back to square one 60 days later and possibly with less money for your home.

In the same way that sellers should work with a knowledgeable agent, buyers, too, should hire an agent who understands the market to ensure appraisals align with the agreed-upon price.

Feel free to reach out if you’re curious about your home’s value or just want to chat about the selling process. It won’t cost you anything for a quick look, and you’ll get a better home value estimate than Zillow. You can contact us at (503) 809-8898 / (503) 572-8865 or shelby.campbell@fairwaymc.com. We’re here to help.