{"id":6115,"date":"2020-12-20T09:34:55","date_gmt":"2020-12-20T14:34:55","guid":{"rendered":"https:\/\/dankrell.com\/blog\/?p=6115"},"modified":"2022-12-13T10:14:26","modified_gmt":"2022-12-13T15:14:26","slug":"price-is-everything","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2020\/12\/20\/price-is-everything\/","title":{"rendered":"Price is Everything"},"content":{"rendered":"\n
\"Price<\/a>
Home owner equity<\/figcaption><\/figure><\/div>\n\n\n\n

Home sellers want to get top dollar, and home buyers want value.\u00a0 This is a hard to truth to acknowledge, but regardless of your home\u2019s condition, location, etc. it all comes down to the home sale price.\u00a0 Don\u2019t just take my word on it. There\u2019s plenty of peer reviewed research on the topic.\u00a0 For example, Han and Strange\u2019s study<\/a> that demonstrates how home price effects home buyers\u2019 response and motivation to visit and\/or make an offer on your home (What is the Role of the Asking Price for a House?<\/em>; Journal of Urban Economics; Volume 93, May 2016, P115-130).\u00a0 The conclusion indicated that list prices that are consistent with neighborhood values (not overpriced) maximize home buyer engagement.\u00a0 Price is everything .<\/p>\n\n\n\n

The \u201cprice is everything\u201d concept applies to any housing market<\/a>.\u00a0 It applies when the market is slow, and even when the market is doing well.\u00a0 Take for example this year, when it seemed as if any home that come on the market sold quickly. However, there\u2019s a caveat: homes that were priced correctly<\/em> sold quickly.\u00a0 Homes that were overpriced took much longer to sell.\u00a0 For those overpriced homes that sold, they sold for less than original list price.\u00a0 <\/p>\n\n\n\n

As home prices<\/a> continue to appreciate, home sellers are eager to push the envelope when setting their list price.\u00a0 But home buyers are savvy and won\u2019t overpay for a home, so creating a realistic pricing strategy is key to your home sale success.\u00a0 Things to consider include your home\u2019s condition, your local market, and your competition.<\/p>\n\n\n\n

The\nmain tool to help you decide on a list price is the CMA (comparative market\nanalysis), which you can get from your agent. \nThe CMA is not an appraisal, but it is a snapshot of market activity for\nsimilar homes in your market area.  The\nCMA can show how homes like yours (that are similar in size, style, age and\ncondition) sell by price and days on market. \nTypically, the CMA is broken down into 3-month, 6-month, and 12-month\nsegments to show how home sales are trending. \nCompare active homes to homes that sold as well as those that didn\u2019t\nsell for sale price and days-on-market). \nAlso be aware of any seller concession, which can affect your net sale.  Finally keep track of neighborhood active\nlistings, this is your competition that can also help you modulate your price\nif needed.<\/p>\n\n\n\n

To\nhelp sellers understand how their homes compare to the competition, I used to advise\nclients to visit neighborhood open houses. \nThis was helpful in understanding how to prepare their homes by\ncomparing the homes\u2019 condition and features. \nAlthough visiting open houses may not be practical for you these days,\ntechnology makes it easy to see the interior of home via HD pictures, virtual\ntours and floor plans.  <\/p>\n\n\n\n

Another pricing strategy that many home sellers use to get more buyer traffic is \u201cjust-below\u201d pricing.\u00a0 Just-below pricing is reducing your decided list price below the rounded number.\u00a0 For example, if your list price is $450,000, the just-below price might be $449,900. This strategy was demonstrated through research by Beracha and Seiler <\/a>(The Effect of Pricing Strategy on Home Selection and Transaction Prices: An Investigation of the Left-Most Digit Effect; Journal of Housing Research<\/em>; 2015; Vol. 24, No. 2, pp.147-161).\u00a0 Just-below pricing works best the list price is rounded down to the nearest hundred or thousand.<\/p>\n\n\n\n

Original published at https:\/\/dankrell.com\/blog\/2020\/12\/20\/price-is-everything\/ <\/p>\n\n\n\n

By Dan Krell
Copyright \u00a9 2020<\/p>\n\n\n\n

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Disclaimer<\/a>.\n This article is not intended to provide nor should it be relied upon \nfor legal and financial advice. Readers should not rely solely on the \ninformation contained herein, as it does not purport to be comprehensive\n or render specific advice. Readers should consult with an attorney \nregarding local real estate laws and customs as they vary by state and \njurisdiction. Using this article without permission is a violation of \ncopyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Home sellers want to get top dollar, and home buyers want value.\u00a0 This is a hard to truth to acknowledge, but regardless of your home\u2019s condition, location, etc. it all comes down to the home sale price.\u00a0 Don\u2019t just take my word on it. There\u2019s plenty of peer reviewed research on the topic.\u00a0 For example, … <\/p>\n

Continue reading “Price is Everything”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[469,33,382,13,1170],"tags":[936,1038,810,912,633,797,517,507],"class_list":["post-6115","post","type-post","status-publish","format-standard","hentry","category-home-prices","category-home-pricing-strategy","category-home-seller","category-real-estate","category-selling-a-home","tag-home-prices","tag-home-pricing","tag-home-pricing-strategy","tag-home-seller","tag-home-selling","tag-real-estate","tag-selling-a-home","tag-selling-strategy"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-1AD","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/6115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=6115"}],"version-history":[{"count":5,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/6115\/revisions"}],"predecessor-version":[{"id":6592,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/6115\/revisions\/6592"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=6115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=6115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=6115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}