The Phoenix metro housing market has been “crazy,” “abnormal,” “insane” during the past two years – choose your own adjective. Many sellers have been able to get thousands over list price for their homes with no repairs or appraisal contingencies.
However, in the past few months the increasing inventory and rising interest rates have caused the home buying market to begin to stabilize, and transition towards favoring home buyers. With that in mind, as a seller you should carefully think about how you should price your home.
What Are My Choices?
Your choices are simple:
- Price Above Market Value
- Price At Market Value
- Price Under Market Value
Let’s briefly discuss each of these options.
Pricing Above Market Value
As a general rule pricing high “just to see what happens” is a bad strategy. Today’s buyers are well educated in this market and they will likely have their Realtor® do a market analysis on any home they’re interested in buying. Sellers still have the advantage of the low inventory available to buyers, but with interest rates so high, there are also fewer buyers. If your home is overpriced, you run the risk of your home sitting on the market for longer which looks bad to prospective buyers. And if you do find a buyer, there’s a chance that the home won’t appraise.
Pricing At Market Value
Your Realtor® will provide you with a CMA (Comprehensive Market Analysis) to help you determine your homes value. There are advantages at pricing at market value. First, buyers and their agents will recognize that your home is priced fairly. Your home will tend to show up in buyers’ searches if the home is priced within their budget. If your home is priced at market value, you won’t have to worry about the appraisal.
Pricing Below Market Value
This might be a valuable strategy for you if you’re relocating or need a quick sale. If you have a large amount of equity in your home, you could have the ability to leave a bit of money on the table. Certainly a home priced this way would receive a lot of interest from buyers and will likely sell quickly. You may even get multiple offers, some of them possibly over the list price.
The Bottom Line
All three methods for pricing your home are relevant, depending on your circumstances. If you have a very unique home or you’re not in a hurry to sell, you could list it over market value. If you’re relocating, or you need to sell quickly, pricing the home slightly under market value could be the best strategy. However, for the majority of sellers, pricing the home at market value is the best option to attract buyers.
Contact the Donnelly Group
If you have questions about pricing your home, the team at the Donnelly Group have the knowledge and expertise to help you get it right. Please don’t hesitate to contact our team at 480-792-9700 or by email.