Pricing a home correctly is important for homeowners who are looking to sell.  No one wants potential buyers to be dismissive of their home because it was not priced accurately. A home priced over market value is an obvious deterrent to potential buyers unwilling to pay more, but a home priced under market value can also deter potential buyers who may believe something is wrong with the property. Meanwhile, a home that is accurately priced may attract interest from multiple buyers, which increases the likelihood that it sells for a more competitive price. 

During the recent improving market, many homeowners followed a simple strategy to sell their homes: adjusting their asking price slightly higher than similar homes in their neighborhood to maximize profit. Homes that were listed higher than the perceived market value were still selling, a continued upward movement of home values.

The market today is showing signs of correcting itself. The correcting market reflects a drop in the price of homes by 10% or less, according to US News & World Reports (Nov 2022). As a result, homes are sitting on the market longer. This causes sellers to need price reductions in order to attract sales. In a correcting market, time is working against you. This means that if a home is not sold quickly it could potentially be losing value over time.  A home that is not accurately priced initially may force the seller to make multiple price cuts, which may not look attractive to potential buyers.

Open house attendance and number of showings are great indicators as to whether your listing is priced correctly. Open houses that are attracting little to no interest are probably listed about 10% or more too high. If you are getting some showings, but not a lot, you're most likely listed about 5-10% too high. Homes that are well attended at open houses, but are not attracting offers, are most likely priced 3-5% too high.

The goal with correct pricing is to create competition amongst potential buyers. Multiple offers will more than likely result in a bidding war and a final sale that exceeds the asking price.  

Remembering these helpful tools as well as employing a trusted real estate professional can aid in maximizing visibility and the return on your home.

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