When you decide to sell your house, your main goal is usually to sell it quickly and for the best price. However, many sellers are setting their prices too high these days. They might not realize that the market has changed as more homes are available. This often leads to increased price cuts, but it doesn’t have to be that way. Here’s why.

Realtor.com data shows that in February, we saw the biggest number of price cuts for that month since 2019.

If you think about how 2019 was the last year we saw a typical housing market, that really highlights the significance of where we are now. It looks like we're returning to what’s considered normal for the market.

This isn’t the hectic seller’s market we experienced a few years back. You might not fetch the same price your neighbor received during the peak of the pandemic. So, it’s a good idea to adjust your expectations.

Here’s the truth. If you set your price too high and then have to lower it later, you might end up with offers that are less than what you would have received if you had priced it correctly from the beginning. So, how do you prevent this? You rely on your agent for guidance.

How an Agent Helps You Nail the Right Price

A good agent won’t just guess the price of your home. They’ll analyze real data and current market trends to determine its true value today. This way, you’ll set a realistic price that attracts serious buyers.

Your agent might suggest pricing your home a bit below market value to draw more attention and generate competitive offers. Here’s how they figure out the ideal price for your property:

• They focus on recent sales. What did comparable homes in your neighborhood really sell for? Not just the listing prices, but the actual sale prices.

• They take a close look at local market trends. The value of your home isn't just what you think it's worth; it's really about what buyers in your area are ready to pay.

• They develop the right plan. They'll ensure your home is priced to draw interest and create a feeling of urgency for potential buyers.

Why Overpricing Backfires

Some sellers tend to dismiss their agent's advice and decide to set a higher price just to see how it goes. They might think they could get their full asking price or at least have some flexibility to negotiate. However, starting with a high price often ends up being more costly, and here's why:

• Buyers might overlook it altogether. Nowadays, many buyers are really watching their budgets. If they come across a home that appears to be overpriced, they’ll probably just move on instead of trying to negotiate.

• If your home stays on the market for too long, buyers might start to think there’s something wrong with it. This perception can make it even tougher to sell later on.

• If a home needs to have its price reduced, it often ends up selling for less than what it could have if it had been priced correctly from the beginning.

Check out the graph below. It uses data from the National Association of Realtors (NAR) to illustrate how the longer a house remains on the market, the lower its selling price tends to be.

This graph indicates that homes listed for sale tend to sell at full price if they go under contract within the first four weeks. From what I’ve seen, this typically applies to homes that are priced at or slightly under the current market value. When a home is priced correctly, it attracts buyer interest, often leading them to pay the asking price or even bid higher when competing with others.

If a house isn’t priced correctly, it won’t sell as fast. This graph illustrates that after the first four weeks on the market, the price typically begins to decline. This happens because buyer interest wanes over time. As a result, sellers are more likely to either accept a lower offer, as that may be their only option, or decide to lower the price to attract new interest.

Bottom Line

You don’t want to list your home too high and let it sit on the market, only to end up lowering the price for it to gain interest. Let’s talk so we can avoid that situation.

To ensure your home sells quickly and at the best price, let's discuss the ideal pricing strategy for your property.