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Want to Sell Faster? Bump Up the Price!

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!

Buyer’s View

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.

  • 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!
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 today at (661) 441-3304 to schedule an appointment and get help selling your home faster!