You read it again.
Isn’t the point of listing your home to sell it? What home isn’t priced to sell?
Because “priced to sell” is somewhat of a befuddling term and appears as though it could apply to any listing, this guide will help sellers understand how the phrase “priced to sell” is used in the real estate industry, what it conveys to buyers, and whether you should use it.
Condition or motivation are probably the two biggest factors that determine how and where a seller should price their properties.
What does ‘priced to sell’ mean?
The phrase “priced to sell” means that a home is priced competitively for what it offers. It signals to buyers that the listing price is somehow attractive or that the home isn’t overpriced.
When a seller uses the phrase “priced to sell” in their listing, it’s usually because they’re motivated to move their home quickly. The asking price will likely be lower than similarly sized homes on the market in an effort to make the property a strong competitor.
“Everyone’s motivations affect their pricing decisions,” says David Brownell, a top real estate agent in Las Vegas. “A seller’s circumstances are sometimes pretty unique. If someone needs to be at a job in two weeks or 30 days, that’s going to affect their pricing strategy compared to a seller who’s just thinking of moving to be closer to the grandkids at some point.”
Why a home might be listed as ‘priced to sell’
Someone may list their home as priced to sell for a number of reasons, but Brownell says it mostly comes down to two drivers: how fast the seller needs to move and what kind of shape the house is in.
“Condition or motivation are probably the two biggest factors that determine how and where a seller should price their properties,” he says.
Here are a few of the most common examples of why someone might list their home as priced to sell:
If you relate to any of these scenarios, you might consider using the phrase “priced to sell” or similar language in your listing — but first, you should consult with a top real estate agent on how buyers tend to respond to the label in your market.
Should you add ‘priced to sell’ to your home listing?
For its limited advantages, “priced to sell” has become a bit of a real estate cliche and many buyers will breeze past the phrase, without considering the seller’s intentions. Online home search tools have made buyers more educated.
“It’s just something that my eyes I think kind of gloss over,” Brownell says.
As a result, the inclusion of marketing phrases like “priced to sell” are less likely to sway a buyer’s decision. They’re looking at the numbers and how the home stacks up to other properties they’re considering, not the marketing pitch.
Alternative: Use ‘priced under market value’
Instead, Brownell recommends using a phrase like “priced under market value” if you want to convey a desire to sell your home quickly in the listing. This alternative tends to resonate more among today’s buyers who can compare the listing price to that of similar homes in the area quite easily online.
“The language must be relevant to the current times in real estate,” Brownell says. “Those online search tools that consumers have have taken away the persuasiveness of many, if not most, of those taglines.”
While writing the language around price may be important for your listing, sellers should remember that other parts of the listing are equally, if not more, critical to buyers. Efforts to make the listing shine include:
- Present a clean and decluttered home.
- Include professional photos that capture the property with the best angles and lighting.
- Write a compelling property description highlighting top location features and property highlights.
- Add a 3-D walkthrough to give buyers the chance to experience the home online.
Develop your pricing strategy
Before you decide to use a marketing phrase like “priced to sell” in your listing, you need to determine what your list price should be. The following tips demystify the process of setting an asking price to get you started on the right path.
Begin with a home value estimator
Start the process of researching your home value with an online tool such as our Home Value Estimator. Online home value estimators use publicly available data such as tax records and the sales histories of comparable listings to generate a quick ballpark figure of what a home is worth.
Our tool collects additional information about your home with a short questionnaire to consider factors like how much work the house needs and what type of property you own. We then pair those insights with data from multiple trusted sources to provide a home value estimate in as little as two minutes.
“I think a good step for sellers is to go look at some of these online home value estimate models that have been created,” Brownell says.
However, you shouldn’t stop there. To get a more accurate pricing picture, use the comparative market analysis from your real estate agent, which will take into account additional details such as proximity to transit, water views, and other aspects of the individual home that may have intrinsic value.
Compare your home to similar properties
Property values are often hyperlocal and ever-shifting. Consequently, real estate agents and appraisers rely on comparable sales, known as “comps,” to determine how to price a home.
To be a “comp,” a house must have been sold recently (within the last six months — and preferably within the last three) and resemble yours in size, location, and condition. The most accurate comps will be within 100 to 200 square feet of your home’s size and be positioned with your neighborhood.
A thorough comparative market analysis will also take into consideration current market trends, the number of bedrooms and bathrooms in your home, and local factors, such as whether your home is near railroad tracks or a busy street. This process allows sellers to get a sense of their competition and provides a price range to work off of.
Adjust your price to meet online search tool criteria
Once you have an approximate price range for your home, the next step is to tailor your price for maximum visibility within the online home search tools that 97% of today’s buyers are reported to use.
Online search tools typically allow buyers to search for prices in $25,000 to $50,000 increments and only display homes that meet that range once the filter is set.
That means if you list your home for $428,000, for example, people searching for $425,000 homes may not see it unless they expand their budget range.
Setting your home’s price just under a filter’s threshold can help get more buyers looking at your property.
As much as every seller wants to maximize their profits, a higher listing price doesn’t necessarily translate to that desired outcome. Sellers need to make sure the price of their home is a true reflection of the fair market value in order to avoid overpricing. Overpricing a home can cause a house to sit on the market, causing buyers to wonder why it hasn’t sold and ultimately resulting in lower offers.
Overpricing your home can also turn off some buyers who may be experiencing house-hunting fatigue. Though it’s still very much a seller’s market, only 53% of agents say home prices are on the rise in their area and 50% say that reductions are becoming more common, HomeLight’s Top Agent Insights for End of Year 2021 report found.
“The risks of overpricing in the current market are starting to show their head,” Brownell says.
Though recent trends raise the risks of overpricing your home, setting the listing price too high is always a major risk. Top agents agreed that the biggest mistake sellers made in 2019 was overpricing their home, a HomeLight study found, with 70% saying sellers fell prey to this pitfall.
Focus on getting the price right first
One of the best resources when you’re pricing your home is your real estate agent. A top listing agent will bring a bevy of local knowledge and access to their vast networks to help you sell your home.
What’s more, agents won’t be influenced by an emotional connection to the home, so they can help you set a listing price based on practical factors, such as your home’s condition, age, location, and how it compares to nearby properties.
Keep in mind that pricing your house accurately from the start is going to be more important than using sales language. Buyers more than ever are equipped with property information online to see through any gimmicks.
Once you have that foundational pricing strategy set, chat with your real estate agent about whether to garnish your listing with any additional add-ons such as “priced to sell” or “priced below market value” depending on your individual selling timeline and motivations.
Header Image Source: (Tiko Aramyan / Shutterstock)