How to Price Your Mississippi Home to Sell for Top Dollar
One of the most difficult aspects of selling any house is that of pricing. While it may seem to be a fairly straightforward feat, there are plenty of ways you can either price your home too low, causing yourself to miss out on your potential profits, or price it too high, and scare away potential prospects. Either way, before you attempt to go it alone, be advised that there may literally be hundreds of thousands of dollars on the line. Additionally, a home that is priced too low can be difficult to close as you may not even have enough to cover closing costs and other fees, and may even make it more difficult for you to purchase other homes in the future. Nevertheless, given that Mississippi is presently considered to be a very hot market, keep in mind that the prices of houses in Mississippi are up overall. In particular, home values in the area have gone up 3.8% over the course of the last year. With that in mind, let’s review some of the factors involved in determining the price of your home.
- What are the Factors in Determining the Price of a Home:You need to know if you’re in a buyer’s or seller’s market. Also, whether or not you need to sell the home quickly can play a major factor. You also need to know that selling a luxury home often takes more time than selling one that is more on the typical side. You must also decide whether or not you are willing to pay for renovations before selling the home or if you will be selling the home as-is. On the flip side, if your home has been newly remodeled, this will also need to be factored into the price of the home.
- Asking Price vs. Selling Price:The difference between the asking and selling price is the asking price is what the selling asked for while the selling price is how much the house actually sells for.
- Real Estate Pricing Psychology:The psychology of real estate tells us that the price influences the buyer’s perceptions and actions.
- Home Price Reduction Strategy:If a house is not getting any offers, you need to develop a strategy to lower the price and attract new prospective buyers.
- Myths Around Pricing Your Home:Some of the most common myths around pricing your home are that listing a higher price will earn you more money, the value you perceive your home to be is most important that its comparable value, you must list it for the value price listed on the internet, the total cost of renovations should be included in the selling price, price reductions always deter buyers, accepting the first offer means it was priced too low, you should always be willing to wait for a better offer.
What are the Factors in Determining the Price of a Home?
No matter what logic you use to price your home, taking the time to ensure it is priced properly can mean the difference between attracting a slew of eager buyers and waiting a long time until you find anyone even interested in purchasing the property. Nevertheless, in addition to the aforementioned aspects of pricing, you also need to be aware that there are various micro and macro factors to consider.
The Fed interest rate is often a major factor as this rate is key due to the fact that it sets the costs for banks to borrow money, which is a vital component of how mortgage rates are established.
On a smaller scale, the homes that your house is surrounded by, as well as homes that have similar traits to yours play a role in how much you can sell your home for.
Another major factor to consider when pricing your home involves the state of the economy, in general. Things such as unemployment rates, GDP, income growth, among many other economic factors, play a major role in how homes are priced and what they actually sell for.
Moreover, the location of the home also plays a small role in how much it is priced for. For instance, if the home is located in close proximity to good schools, employment opportunities, and/or shopping/recreational centers, it will be considered worth more, than it is not.
The percentage of homes purchased by investment buyers can also play a major role in how homes are priced. For instance, if these investors are all triggered to sell their homes at once, this could cause issues and result in a lowered value of homes in general due to too many homes hitting the market at the same time.
On a smaller scale, the upgrades you make to your home can allow you to sell it for more money. However, given that there is a wide variety of buyers that actively seek out residences that require fixing, making too many upgrades may actually make your home more difficult to sell in some areas. Either way, if you are renovating a home with the hopes of selling it for more money, you need to take the time to consider what the value of the upgrades truly is. For instance, if you choose to spend money on a much-needed new roof for the home, you are likely to recoup at least 80% of the costs when you sell the home. Additionally, renovating areas such as kitchens and bathrooms can also add significant value to the home and make it easier to sell. On the other hand, if you add an unnecessary amenity, such as a deck, this may attract more buyers but not necessarily more money.
Asking Price v Selling Price
As mentioned, understanding the difference between the asking versus selling price is vital to the sale of your home. On the one hand, the price you are asking for is generally considered to be a starting point for negotiations. Obviously, no matter how badly a prospective buyer wants to purchase your home, they will want to try to negotiate a lower price. Therefore, the home should never be priced lower than what you are willing to accept. Generally speaking, the asking price is based on comparable houses in the area, among other things. Moreover, those who wish to sell their homes more quickly should set an asking price that is lower than market value while those who are willing to wait a while longer can set their prices a tad higher. Nevertheless, while many homes sell for lower than the asking price, in cases in which the home is in high-demand, this can result in a bidding war, which typically leads to a selling price that is above the asking price.
Real Estate Pricing Psychology
Moreover, there are various psychological factors that can also play a role in how the home is priced. For instance, in addition to factoring in things such as whether it is a buyer’s or seller’s market, as well as how eager you are to sell the home, you also need to consider a variety of factors. Some of which, are as follows:
- Price Charming:Just as it has been determined that consumers are more attracted to prices that end in $.99, the same can be applied to the real estate realm. For instance, rounding your price down to the nearest $9,000 is one common method of price charming. So, for instance, if you have an asking price of $500,000, you are better off pricing your home at $499,9000, in order to entice more buyers. Additionally, you must also keep in mind that homes priced under $450,000 tend to sell quicker than homes priced above it.
- Precision:Another method of attracting more prospective buyers is to set a precise price. For instance, more people will be attracted to a home that is priced at $250,662 as opposed to $250,700. This is because the former makes it seem like the seller is only willing to sell the home for a particular price.
- Competitive Pricing:Lastly, you should be setting your asking price at a price that is comparable to the value of homes that are for sale or have recently sold in your area. However, once you have found an interested buyer, they should be approached like it is already their home. By taking the time to ask the buyer questions about how they plan to decorate, etc. you may be able to raise the asking price. Buyers are more likely to pay more for a home they truly love.
Home Price Reduction Strategy
Additionally, if you have priced your home too high and fail to attract buyers, are having very few showings, if your home was appraised for well lower than your asking price, you may need to implement a strategy to reduce the price. Once you had taken the time to make sure you have uploaded sufficient pictures and videos of the home, have created a complete listing using the necessary keywords, have listed your home in multiple places, have posted the proper signage in the appropriate areas, and have addressed all buyer feedback, you are ready to reduce your price. In order to properly reduce the price of your home, you need to reduce the price by completing the following steps:
- Move Quickly:Given that the number of showings and those who attend open houses dramatically drop within the first couple of weeks, once you figure out that you need to reduce your asking price, you need to quickly lower the price as quickly as possible to ensure that as many prospective buyers see the new asking price as possible.
- Be Realistic:In terms of how much lower you asking price, you need to be realistic. Although you may be becoming restless and are eager to sell, you need to be realistic in terms of how much money you are actually willing to accept. Never price your home at a price that is lower than what you will find acceptable.
- Check to See What Others are Doing:As mentioned, you should check to see how much homes in your area are priced to determine the appropriate price of your home.
- Be Firm:While one price cut can serve to attract new buyers, multiple price cuts can deter new buyers. Therefore, you need to take the time to conduct research and ensure that you are prepared to stick with the new price.
Myths Around Pricing Your Home
As far as the myths about home pricing are concerned, there are a few things you need to be aware of. First of all, although pricing your home at a higher rate can earn you more money, it can also serve to deter potential buyers. Additionally, you have to leave sentimentality out of your pricing. The only things that make your home more valuable than comparable homes are things such as adding more bedrooms/bathrooms, adding things such as a finished basement or attached garage, a lot that is larger than average, or a low level of competition. Also, online estimator tools are just an estimate. You need to do your research before actually setting the price. Moreover, lowering the price by $1,000-$2,000 can attract more buyers than it repels. The first offer can actually be the best offer and you should not risk missing out on good offers by waiting for better offers to come.
Pricing Your House to Get the Biggest Dollars
If you find all of this information to be overwhelming, as many do, this is the exact reason you need help from a professional real estate agent. Luckily, Lee Will Buy It is your best option for real estate agents in Mississippi, in terms of selling your home as quickly as possible, and for top dollar. Helping you to price your home and sell high, either we will find you a great buyer or Lee will buy it. Also, by simply subscribing to our website, you will receive information on how to put the finishing touches on your home before listing it, how to find out about the prices of comparable homes in your area, how to determine your home’s market value and much more!