Jennifer M. Lee, PhD
Sweet Spot Pricing for Sellers
Updated: Jan 19, 2021
If you want to sell quickly AND for the most money, the house must be priced in what I call the “Sweet Spot.” The Sweet Spot is the price that will:
Garner the HIGHEST interest in the shortest amount of time (which feels good to you, and can create multiple offers)
Reflect any updates that buyers are expecting in this market, or compensate for any “updates” that must be done
Accommodate and compensate for potential negotiations, but moderately
So what REALLY goes in to pricing a home?
1) Neighborhood comparables: Closed houses within a certain time period, typically 3 months in our seller’s market. Under contract and actives should be considered. Closed matters most for pricing, but it’s important to consider how long houses which are under contract took to go under contract (Days on Market or DOM), and your competition in the neighborhood with other “actives”
2) Town comparables: These include other neighborhoods, new construction, other active competition. Know that buyers will choose the lowest price house that fits their needs that is in the best condition. Buyers typically look at wider areas, which include multiple neighborhoods.
3) Upgrades in a home: If you’ve got laminate countertops and your competition has granite, that’s a factor.
4) Buyer expectations: Never underestimate buyer expectations. Buyers are spending a lot of money, and typically don’t want to spend more money out of pocket after closing to do fixes, repairs, updates, upgrades. They really want to just move in and relax on their couch and eat cheese.
5) Your personal needs and motivations: If you need to move, you have to consider that in pricing a home. Higher price than comps=longer time on the market.
The PAIN of Overpricing
Not kidding…physical and emotional pain ahead.
If you choose to “test the market,” more often than not, you end up selling it for significantly less…not only less than your expectation, but less than what you could have originally received if you had priced it in the Sweet Spot.
1) “The market” truly determines pricing. Economics 101 is all about supply, demand, and the rule that something is only worth what people will pay for it. #beaniebabies
2) The house you are selling is what other people perceive it to be. #PerceptionIsReality
3) Pricing too high on the outset means that you will likely have fewer showings, your house will not sell quickly, and you will receive slightly insulting low-ball offers. (Pain)
4) Longer Days on Market lead buyers to ask, “What is wrong with that house?” It stigmatizes the property.
The Pleasure of Sweet Spot Pricing
More Interest Quickly
Fewer Days on Market
Less stress keeping the house SHOW READY
Easier negotiations from the outset
Less stress overall. Your house will go under contract quicker, and you can move on with your life!
If you set appropriate expectations to begin with, you’ll be less stressed, experience fewer highs and lows, and simply feel calmer and more in control of the process. (Pleasure!)