The importance of getting the price right: 4 reasons why pricing right from the beginning matters

A report from the National Association of Realtors uncovered a great deal about having the right pricing for a home early on. They found the longer a home sits on the market, the lower the sales price becomes in comparison to the listing price. And we’re not talking months — the sales price starts to drop if the home sits longer than a mere two weeks.

What’s more, the longer a home sits on the market, the more likely it is to have an increase in the number of times its listing price is reduced. NAR also found a third of homes sitting on the market for 3 to 4 weeks had their price reduced at least once. As the weeks on market increased, so did the number of times the price continued to reduce.

By getting the right price early on, you can increase the odds buyers will be interested in the home. In turn, this decreases the chances the home will sit on the market for a lengthier timeline, also reducing the odds you’ll need to lower the listing price.

#2. You can influence buyers’ perceptions from the very start

The listing price is the proverbial price tag of the home. Price the home too high, and home shoppers might see the sellers as taking advantage, and will immediately count it out of their budget and potential purchases. Price it too low, and these same shoppers might question if something is wrong with the home, or if there’s a catch to making an offer. Furthermore, if the price isn’t right and the home sits on the market for weeks, it can become stigmatized simply from being on the market too long. Buyers could be left wondering why the home hasn’t sold in a timely manner.

Striking a balance and getting the right price from the beginning can give you a competitive edge. When home shoppers see the home is priced comparably to similar homes in the same area, they can feel confident in their spending power and that there’s no “gotcha” moment waiting to happen. This will help them feel confident in their interest in the home and pursue how they can possibly make an offer.

#3. The right price can spur a bidding war

If you’re in a seller’s market and the home you’re listing is priced comparable to other homes in the area, it’s highly likely it’ll receive multiple offers at once. Throw in any upgrades, amenities, or just a matter of being available when other listings are getting snapped up, and you’re also more likely to encounter a bidding war. A bidding war happens when multiple buyers want to purchase the same home and need to make their offers stand out from one another so that sellers are more likely to accept theirs.

There are a variety of ways buyers can pursue swaying a seller’s decision, but one of the best ways to do this? Making a higher offer.

#4. You can boost the odds of getting a higher offer on the home

The right price is considered fair and comparable to the local market, spurring eager home shoppers to make offers. When similar offers come in, and buyers are pushing to close the deal, it’s highly likely for them to offer more than the listing price to increase the odds you and your sellers will accept.

This results in an even higher selling price than a listing price, and happy buyers and sellers alike. Don’t underestimate the power of the right price!