For someone selling their home price is more than a dollar figure. It’s a crucial part of an overall marketing mix. This is the second in a series of blogs on the “4 P’s” of a marketing mix, called “Guide to Marketing for Selling a House”.
First, a refresher on the Four P’s:
We use the 4P’s model when deciding how best to position your homes to be competitive in the market. We also use it to identify the errancies of an expired, or ‘failed’, home marketing strategy. We go through and answer particular 4P’s questions – as we’ll define in greater detail later.
Ultimately we develop the marketing strategy from the customer’s perspective, by asking customer focused questions:
- Does it meet their needs? (product)
- Will they consider it’s priced favorably? (price)
- Will they find it where they shop? (place)
- And will the marketing communications reach them? (promotion)
Guide to Marketing for Selling a House: Part II – PRICE
Your Home’s List Price
The most common culprit for a home not selling is your home’s list price. A home incorrectly priced attracts the wrong buyers or worse – none at all.
Establishing the listing price of your home must take into account many variables from other homes in the area like yours that have sold in the recent past. Things like market conditions, time of year your home is placed on the market, how long you personally have to get your home sold, condition of your home and how it compares with similar properties, and many other factors help determine market value. A seasoned real estate agent knows how to properly prepare a Competitive Market Analysis (CMA) for their clients.
COMPETITIVE MARKET ANALYSIS (CMA)
Establishing the proper price for your home when introducing it into the marketplace is critical to a successful sale. A thorough understanding of the market and how your home compares to the competition will lead to an effective pricing strategy.
We always prepare a Competitive Market Analysis for our selling clients. We know they are placing their trust in us to provide them with everything they need to make an educated decision regarding the asking price of their home. We spend a great deal of time researching, using many tools and reports that are not commonly used by others, so that we can provide the most accurate analysis of a client’s home’s present value. Setting the right price makes a home competitive, and allows us to sell the home more quickly and for a greater net dollar amount to the client.
LOSS OF MONEY OVER TIME
Homeowners who price their homes over market value often end up selling for under fair market value. Don’t put yourself in a position where you could lose thousands of dollars.
The longer a home is on the market, the greater the disparity between asking and selling price. Here are examples of what we mean:
- Homes on the market for 4 weeks or less, sell for near or above full price.
- Homes on the market for 4 to 12 weeks, sell for 2% – 4% less than asking price.
- Homes on the market for 13 to 24 weeks, sell for 6.5%-7.5% less than asking price.
- Homes on the market for more than 24 weeks, sell for 10% less (or greater) than asking price.
THE “MAGIC” PRICE POINT
If the valuation of your home results in a price that falls close to an increment cutoff used in home searches online, consider choosing the “magic” price point. Put simply, when searching for homes online searches often use Min. and Max. price points based on specific increments, usually $25k or $50k. If you list just below and increment cutoff, you could miss a large number of buyers.
For example, let’s say a home’s valuation falls between $290,000 and $300,000. Some might advise pricing the home at $299,000, playing to the psychology aspects of the price. While this strategy has merit, consideration should be given that by choosing that price, the home would not be shown in the results of someone searching between $300,000 and $350,000.
If you list at $299,000, you will miss a large number of buyers. Versus if you list at $300,000, your home shows up in both search results.
EVERYONE WINS WHEN THE PRICE IS RIGHT
- Sellers gain prospects for homes priced within their range.
- Real Estate Agents gain inventory to show to their clients.
- Sellers and Agents gain prospects who are serious and less likely to lowball on price, unwilling to risk losing out on a well-priced home.
- Buyers get a home that’s a great value because they are buying at the right price…a price with room for future financial growth.
This is only the second part of a series. To hear more about how we develop the right marketing mix for our clients email or call us today: RisCowan@tds.net or (678) 362-5563.
Part I: PRODUCT – Your Home as a Product
Part II: PRICE – Your Home’s List Price
Part III: PLACE – Places to Advertise Your Home
Part IV: PROMOTION – Listing Promotion