Fueled by low mortgage rates, the virtual workspace, and the desire for more space, home prices skyrocketed during the pandemic. In fact, most homes listed for sale throughout 2021 would end up selling in just days or even hours. Furthermore, many of these sales would end up in bidding wars. Of course, this has all changed since approximately February of 2022. With inflation reaching 40-year highs, we have seen mortgage interest rates rise quickly. These higher rates along with higher home prices have priced many Americans out of the market entirely. Of course, less buyer demand places even more emphasis on the importance of home pricing. Below, we share some things to consider when it comes to home pricing.
Home pricing adjustment tips
Home pricing is a science. Pricing your home too high will result in a lack of showings and offers. Pricing your home too low may result in missing out on substantial profits. For more on this topic, see our previous article titled “How To Price Your Home”. Given the current high home prices, higher mortgage rates, and overall economic challenges, more sellers are having to drop their sales prices. As a seller, you need to be open minded and adaptable to the current market conditions. A few things to consider are:
- Remove all emotions from the transaction: It is normal to have a sense of pride in your home and therefore feel that it should fetch a premium price. With this said, it is ultimately only worth what someone is willing to pay for it. Removing your emotions from the home pricing process will be an important component for success.
- Listen to your real estate agent: Assuming that you have a knowledgeable real estate agent that is very familiar with your local market, be sure to defer to his/her expertise. In the end, you need to let the market dynamics and recent sales data guide you in your home pricing approach.
- Develop a steady and measured approach: Prior to listing your home for sale, it is helpful to discuss hypothetical situations with your real estate agent. For example, it is quite possible that your listing does not get much activity in the first few weeks. If this is the case, you should have a home pricing strategy plan to implement. This plan could even include minor pricing adjustments.
- Price adjustments = listing alerts: Many sellers may not realize this, but whenever you implement a price adjustment, this will trigger a listing alert for any buyers that may have your property in the results for their search criteria. These alerts oftentimes result in additional showings and potential offers.
Pricing adjustments typically mean to lower a home’s price. Needless to say, this is not exactly the most enjoyable discussion between a homeowner and their real estate agent. Nonetheless, it is important to have a well thought-out strategy when listing a home for for sale. This plan should include various hypothetical situations and how they are handled. For example, one strategy could include a pre-determined price reduction of $10,000 if after 2 weeks there are no showing requests on the property. Of course, there are many items to discuss when marketing a property for sale. As long as expectations are discussed and there is consistent communication, the home selling process should not be very stressful at all.
Are you thinking about selling your property in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet and have the power of the MLS right in your hand!