Knowing what the latest research has to say about pricing your home for sale in San Diego is essential to getting the most out of your sale. Linda Moore reviews a new study regarding how to properly price your home for sale.
There is quite a deal of work that should go into pricing real estate for the market. If you aren’t currently embroiled in the market place like a successful real estate agent is, it can take some time to do the research to find out how much homes have sold for in your neighborhood, comparing the amenities, and getting a valuation on you home.
In addition, different pricing strategies may be called for depending on how competitive the market is or how healthy the economy may be. The question then becomes, “Should I underprice or overprice my home for sale?”
Recent research has examined these two methods of pricing homes on the market and made some interesting discoveries. The Wharton School at the University of Pennsylvania recently published a study that showed increases in sales price when the home was listed at an “overpriced” amount compared to homes that were underpriced to attract more bids.
The study found that a home that has an initial asking price that is 10% to 20% above that of similar homes in the area saw in an increase in sales price of $117 to $183 on average. When a home was priced more than 20% higher it would often see a sales price as much as 4 times that amount.
When homes were priced at 10% to 20% lower than similar homes in the neighborhood the sales price saw a decrease of $117 to $187 on average. Researchers believe that this is primarily due to the trait known as “anchoring,” where buyers rely on the first piece of information that is offered and then base their decisions and interpret further data based on this anchor.
Overpricing may get you a better sales price, but underpricing a sale may help you to sell the home faster, so weighing the difference between these methods and whether speed or price is more important to you should be discussed with your San Diego Realtor.
All in all there are benefits and liabilities to both pricing methods so consider all sides before making your decision.