When Selling Your Home in San Diego, How Should You Price It?
If your house didn’t sell initially or you’re considering putting it on the market soon, there’s a question that could significantly impact your selling process. How do you determine the value of your house? Zillow is a great resource for information, though you shouldn’t just rely on Zillow’s estimates for the value, focus solely on your proceeds to purchase a new home, or even look at what the neighboring property recently sold for. Let’s discuss home pricing strategies that considers data insights and consumer habits aligned with your objectives.
A Rise in Expired and Canceled Homes on the Market in San Diego
In line with data from Realtor.com, the number of homes that have expired or been taken off the market increased by 47% in May this year compared to last year. This indicates that homeowners nationwide are choosing to remove their properties from the market out of frustration, especially following extended periods, with no home showings, lack of offers, or unfulfilling price cuts. More buyers enter the market after waiting to buy a home. Sellers are facing challenges with their outdated pricing expectations that no longer align with the current market conditions. If you’ve ever found yourself thinking along the lines of “Let’s wait for the buyer” or “Perhaps I’ll give it another shot this season, ” rest assured that you’re not the only one in that boat. Before you decide to put your home on the market, you need a plan.
The plan begins with understanding the three pricing strategies every seller should be familiar with.
1. Aspirational Pricing
This strategy is exactly what it sounds like: pricing high and hoping the right buyer comes along. It’s a bold move that only works in certain conditions, typically when there are no solid comparable sales (comps) or demand is extremely high.
When it might make sense:
This makes sense when you’re in a one-of-a-kind property with no true comps in the neighborhood. You’re not in a rush to sell. Or you’re testing the market with a Plan B in place.
Here’s the risk with that plan:
Aspirational pricing without a strong marketing strategy can backfire. It shrinks your buyer pool and can lead to longer market times and price reductions. The longer the home stays on the market without going under contract, the more buyers tend to think there is something potentially wrong with the house.
2. Comp-Based Pricing
This is one of the most common home pricing strategy. It’s based on recent sales of similar homes, also known as comparable sales (comps). These are also what an appraiser would use to determine value. It protects you from overpricing and helps your home show up in buyer searches where it matters most.
When it makes sense:
This makes sense when you’re in a neighborhood in San Diego where similar sales have occurred within the last 6 months. Also good when you want to make sure that the home will appraise and buyers can compare it to other like properties in the neighborhood. You are driven to make a sale within a timeframe.
- High side of comps: Maximize value if demand is strong
- Mid-range comps: Balance visibility and price
- Low side of comps: Win attention in a crowded market
3. Event Like Pricing
This tactic aims to instill a sense of urgency and promote competition by setting the price just slightly below comparable properties – a strategy known as a flash sale for real estate –with the objective of drawing in a large number of prospective buyers swiftly. This creates a sense of loss, and buyers start to compete against one another, causing a bidding war and the final price to increase.
You aim to attract individuals who are purchasing a property for the long term or those looking to invest.
Buyers are attracted to bargains. Tend to make decisions when they perceive value in them. Houses listed with this approach typically attract a number of potential buyers and offers. Ultimately, it puts sellers in a stronger negotiating position once an offer is accepted. The buyer feels that if they get too picky, there is a list of people behind them ready to buy the home.
Remember, Don’t List Your Home for Sale Without a Plan
Creating home pricing strategies involves more than setting a price – it’s about developing a strategy.
Marketing tactics go beyond photos and listings on MLS platforms. (A backup plan, for any market fluctuations or changes in your plans)
Making informed decisions relies on having accurate information, from the starting point onward. When you’re considering the option of selling your house, make certain that your approach is tailored to meet your goals and is not built on speculation.