Intelligent Pricing Strategy for Home Sellers
The Denver real estate market is normalizing and that means pricing is even more important than it has been in previous years. Why? Well, we have the most homes available on the market that we've seen since November of 2013 and that means buyers have more options.
If you're a seller, don't think you can pull the wool over the eyes of a buyer. Simply put, buyers are smart. They can tell if a home is overpriced and if it is, they're just going to overlook your home. So let's take a look at the data behind a pricing strategy and why putting your home on the market at, or just below, fair market value is so important.
What the diagram below is showing is that if your home is accurately priced, or what we call fair market value (FMV), your home will capture the attention of 60% of potential buyers. If it's just 5% overpriced, you're only going to capture 30% of potential buyers. And if your home is 10% over fair market value, well, only 2% of potential buyers will look at your home. This is a risk to sellers who want to overprice because as we increase our inventory here in Denver, buyers have more options and they'll easily pass over homes that are too expensive.
As you can see, the proof is in the data and pricing right from the beginning increases your odds of selling your home in a short period of time. In fact, homes that are priced right will go under contract in about two weeks. But homes that are overpriced, well, you're going to sit on the market for about four times longer, or about two months or so, and that's money you could be losing.
The bottom line is that overpricing your home does not mean that you're going to make more money. In some cases, it means you could lose money. So what I like to tell my sellers is that, unlike wine, pricing does not get better over time. And if you're a buyer that's fallen in love with a house, make sure your agent is doing their due diligence and ensuring that you're not overpaying.
This is just a quick overview of intelligent pricing strategy here in Denver. If you have any questions about the real estate market, I'd love to chat, so please reach out. Thank you.