Selling your home can be difficult, especially when the market is slow
and there aren’t a lot of potential buyers in a particular area.
Most people believe that when it comes to being competitive in the market
and attracting a buyer, a low price goes a long way. While this may be
the case with things like regular retail stores, home buying is a different
animal. In fact, believe it or not you may actually be able to sell your
home faster by
raising the price a little bit. Here is why this seemingly counter-intuitive method
actually helps generate interest and locate a buyer for your home faster
than simply waiting patiently.
Perceived Value = Selling Power
The price on an item tells a consumer more than just how much they’ll
have to pay in order to receive it, it’s also a reflection of the
quality of that item. For example, if you have a pair of shoes that costs
you $20 and a pair that costs you $100, you’re automatically going
to assume there are things about the $100 pair that makes them better
and justifies that price difference.
The price on a home is the same: the more expensive it is, the more value
your potential buyers will perceive it to have. Say you and your neighbor
are both selling your homes and have identical floor plans (same square-footage,
number of bedrooms/bathrooms, and same location), but you choose to price
your home higher than they do. What that signals to potential buyers is
that your home has more to offer than your neighbors, either in terms
of features, quality, or condition. As a result, someone may choose to
snap up your home faster, believing they’re getting a better-quality home.
A more expensive home also usually receives higher bids, which means the
sale will close for a higher value, and you’ll actually make more
money on the deal!
When you bump the price on your home, you can completely change the way
a buyer views your home in several ways. For starters, some home buyers
will actually not even consider a home unless it’s at a particular
price threshold, thinking they’re not going to get what they’re
looking for at anything less than that. A slight bump (say going from
$345,000 to $350,000) might put you over that price floor, and generate
the interest of buyers who may not have considered your home an option before.
When a buyer sees two similar homes priced differently, they’ll also
start to look into why your home costs more and what it means they’re
bidding on. When they start looking for answers, they start to focus on
selling points, creating “confirmation bias” and actually
possibly making them more interested in your home than they would your
neighbor’s even though your neighbor’s house is cheaper.
A bump in the price also creates an illusion of interest amongst buyers.
If someone is interested in your home and notices that the price has increased
slightly, this is a sign that perhaps there are a number of bids coming
in on the property, and the seller has chosen to raise the value to gauge
who’s really interested. This is key, especially for properties
that may have been on the market for a while, since a listing that has
sat stagnant for a while often makes buyers question why the home isn’t
being sold, and wonder what’s wrong with it.
Justifying the Higher Price
Let’s say a potential buyer goes and visits both of your homes to
compare the two and determine why your home is more expensive than your
neighbor’s. If your homes are identical, including identical appliances,
similar flooring, other features that are comparable, they’re probably
going to say your house is overpriced and they’ll bid on your neighbor’s.
This means you have to justify the increased asking price in some way—make
your potential buyers believe your home is truly worth the extra cost.
Here are a few ways you can do that.
It’s also highly advised you work with a Valencia realtor who can
help you navigate the market and get the most value for your home.
Call Dippy Real Estate today at (661) 441-3304 to schedule an appointment and get help selling
your home faster!
Staging: Stating your home is simply setting it up for viewers in a way that shows
it in a positive light, such as with clean, well-arranged furniture, clean
floors, and ideally set-up rooms. This is an extremely effective tactic
when it comes to making a sale; homes which are tastefully staged have
been shown to sell over 40 percent faster and for as much as six percent
more in price.
Curb appeal: The first glimpse of a home’s exterior is a major chunk of a potential
buyer’s first impression, and the first impression will have a huge
influence over whether or not they submit a bid. Simply cleaning up your
front yard, including mowing the grass and washing off the front of your
home, can go a long way towards a positive impression, but you can go
even further by spending a little bit of money on some landscaping. High-quality
landscaping has led to homes selling for as much as 11 percent more than
those with unattractive front yards.
Capital improvements: Is your home powered by solar? This is a highly in-demand feature in California
right now, and will no doubt add to the appeal of your home. Newly-remodeled
rooms like the kitchen or bathroom can also go a long way towards justifying
a higher price.
Professional tours: Listings with professional photography or a video tour are perceived to
have far more value than those with just a description and maybe a low-quality
cell phone picture or two. In fact, a survey found that quality photographs
increased perceived value for buyers by over 11 percent, while a video
tour added an additional six percent!