In the competitive world of real estate, pricing a house right is both an art and a science. We’ve gathered insights from experienced sellers and Realtors, who have shared their successful strategies. From using comparable properties for ideal pricing to competitively pricing with unique selling points, explore the nine expert tips on determining the ideal price for a house. When it comes to pricing your home right, here are 9 lessons from successful sellers:
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- Use Comparable Properties for Ideal Pricing
- Employ Strategic ‘Pricing to Sell’ Tactic
- Price Below Market for Competitive Edge
- Analyze Deals and Use ‘Just Below’ Pricing
- Balance Seller Profit with Buyer Attraction
- Consider Unique Features and Market Value
- Conduct Comprehensive Comparative Market Analysis
- Opt for Psychological Pricing Strategy
- Competitively Price with Unique Selling Points
Use Comparable Properties for Ideal Pricing
The best way to determine the ideal price for a house that I sell is to use comparable properties. Comparable properties show us data that is relevant and do not allow emotions to come into play. The most common reason why houses don’t sell is that there is an emotional attachment to a particular price rather than being focused on the data, which shows what has sold and for how much. In order to get a home sold extremely fast, I like to focus on pricing my properties a little bit under what the data shows me the value is in order to generate a lot of interest.
One example of a property sale that followed the above-mentioned strategies is a house flip that we sold in 2022. I knew at the time that the market value of the flip property was around $680,000. By pricing it at $599,000 and holding offers, any prospective buyer thought that they were getting a deal, and so they became emotionally invested in bringing an offer. Because of the volatility at that time, we got multiple offers and sold significantly over asking for around $700,000.
Sebastian Jania, Owner, Manitoba Property Buyers
Employ Strategic ‘Pricing to Sell’ Tactic
Through data-driven analysis and strategic pricing, I’ve achieved successful sales by employing the ‘pricing to sell’ strategy. For instance, when selling a starter home in a competitive market, I priced the property slightly below market value to generate interest and stimulate bidding wars. This tactic created a sense of urgency among buyers, resulting in multiple offers and ultimately driving the selling price above the initial listing. Such agile pricing strategies leverage market dynamics to optimize outcomes for sellers while ensuring a seamless and profitable transaction.
Adam Seguin, Owner, Myrtle Beach Home Buyers
Price Below Market for Competitive Edge
In my experience as a real estate professional, I have learned that determining the ideal price for a house is crucial. This is because pricing is one of those factors that determines whether or not a home will be sitting for longer than is necessary on the housing market.
The truth is, in the real estate market, location pretty much has the upper hand when it comes to determining the ideal market value of a property. So, my go-to strategy for determining the ideal price for a home I am about to sell is to consider the location and research real estate comps in that area. However, one pricing strategy that has resulted in multiple successes in my career as a seller’s agent is to price the home slightly below the market value, and here is why:
The fact is, whether it’s a buyer’s or seller’s market, the real estate market will always be a competitive one. In my experience, I have learned that an agent’s best shot at selling a house faster and for a good price lies greatly in how many interested buyers they are able to attract to see the home. This is why it is crucial to set an attractive and competitive price. However, contrary to popular opinion, the truth is that pricing a home slightly below the market value doesn’t necessarily put my client and me at a disadvantage. Because in addition to being able to sell off the house faster, we get the negotiating edge when it comes to other aspects of the real estate transaction, simply by making buyers an offer they can’t refuse.
Rinal Patel, Founder, Webuyphillyhomes
Analyze Deals and Use ‘Just Below’ Pricing
First, I conduct a deal analysis. As an investor, I examine properties in the area that are similar to the one I’m interested in, which have been sold in the past three to six months. I look for properties that match in terms of size, age, and features or special characteristics. I ignore any distressed sales (like foreclosures) and auctions. Then, I take the average selling price (value) of these comparable properties and multiply it by 70% to 85%—this calculation gives me the price I’m prepared to offer for the property.
If I’m wholesaling the deal, I plan to increase my offer price by 10-15% (which will be my profit when the property closes). After that, I personally believe in using the ‘just below’ pricing strategy, based on how I do my research with price range brackets. It’s usual in real estate to price a bit under a whole number; for example, if I think the right price is $100,000, I’d list it at $99,900 to influence buyers more effectively. This is also because buyers often search for homes within specific price ranges—someone might be looking for homes under $100,000.
From a psychological point of view, a price seems lower if it doesn’t go into the next hundred—$299,000 feels cheaper than $300,000, and $995,000 seems more attractive than $1,000,000! As a real estate investor, wholesaler, or house flipper, it’s important to make buyers feel they’re getting a deal. Pricing just a bit lower than a round number really helps create that impression.
Michael E. Farah, Founder, Realtor and Real Estate Attorney, The Farah Law Firm, P.C.
Balance Seller Profit with Buyer Attraction
In my experience, pricing a home correctly from the start is crucial for a smooth and successful sale. The ideal price balances maximizing profit for the seller while still attracting interested buyers. To determine this sweet spot, I conduct thorough market research on recent comparable sales and current competition. I also factor in the home’s location, condition, upgrades, and intangibles that make it unique. Most importantly, I have an open and honest conversation with the seller about their goals, timeline, and bottom line.
For example, I once listed a three-bedroom townhouse in a popular neighborhood. Based on the market data, I advised the sellers to list at $425,000. They had an emotional attachment to the home’s custom tile work and wanted closer to $450,000. We ultimately agreed on $435,000, splitting the difference. Within two weeks, we had five offers over asking and sold for $450,000. By collaborating with the sellers on pricing, we satisfied their needs and maximized the sale price.
Dmitriy Bobriakov, Marketing Manager, RealEstateU
Consider Unique Features and Market Value
You have to take all things into consideration: the comps, the market trajectory, the specific buyers this home will attract, and, most importantly, the home itself and its special and unique features. This can be tricky, especially in New England, where homes are so different and unique. The best way to determine price is to look at the past sales from the past month, see the activity (how fast did it sell?), and the features of the home, and compare them to the home you are selling. Then, you need to find the value—at what price will people see the value in this home? When they see the value, they will almost always attribute more value for their own personal reasons, resulting in an ‘over-asking’ offer. It’s worked for me every time!
Allyssa Guerin, Realtor, Lamacchia Realty
Conduct Comprehensive Comparative Market Analysis
A comprehensive market analysis is required to ascertain the optimal price for a house, taking into account location, property condition, recent sales data, and current market trends, among other elements. An effective pricing strategy that we have implemented is the utilization of the Comparative Market Analysis (CMA) methodology. This requires conducting research on recently sold or currently listed comparable properties in the area in order to determine their market value.
Through a meticulous analysis of analogous properties’ prices and attributes, it is possible to precisely determine the market value of the house under consideration and establish a price that not only entices potential buyers but also optimizes returns for the seller. To elicit multiple offers and generate interest, we strategically priced a property marginally below its market value. This approach instilled a sense of urgency among potential purchasers, ultimately leading to a successful sale of the property for at or above the asking price. This exemplifies the efficacy of pricing strategies that are guided by comprehensive market analysis in attaining favorable outcomes in real estate transactions.
Jerry Theobald, Owner and Real Estate Enthusiast, AZ’s Best Pool Service & Repair LLC
Opt for Psychological Pricing Strategy
In setting the price for a house I was selling, I opted for a psychological pricing strategy to make the price more appealing to potential buyers. Instead of rounding up the price, I listed the house at a price just slightly below a rounded number (e.g., $299,999 instead of $300,000). This strategy is based on the psychological impact that lower-figure prices have on buyers, making the price seem significantly less at first glance and thus more attractive. The psychological pricing approach generated more interest and viewings, as the listing stood out among higher-rounded figures in search results. This strategy effectively increased the perceived value and affordability of the property, leading to a quick sale close to the asking price and demonstrating the power of subtle psychological cues in pricing strategies.
David Ciccarelli, CEO, Lake
Competitively Price with Unique Selling Points
A detailed examination of the market, similar sales in the neighborhood, and the special qualities of the property are all necessary to establish the optimal price for a home. To determine the selling prices of comparable homes, for instance, I performed a comparative market analysis, taking location, square footage, and amenities into account.
I found that pricing the house competitively in the market and emphasizing its unique selling points—like a recently rebuilt pool or energy-efficient home improvements—was a successful pricing strategy. Further enticing buyers were incentives such as paying for closing costs or providing pool maintenance services for a predetermined amount of time. Potential buyers showed more interest as a result of this strategy, which eventually culminated in a successful sale at a competitive price.
Jacob Mendrin, Owner and Home Care Enthusiast, Pool Care Arizona LLC
