How to Price Your Home Correctly to Sell

Key Takeaways:

• Avoid Overpricing: Never price your home too high because it has been proven to repel buyers.
   
• Psychological Impact: Multiple price reductions will indicate you are desperate for buyers or there is something wrong with the house.
   
• CMA: Use CMA or a Comparative Marketing Analysis to figure out the best price for your home. It is basically comparing your house to recently sold or listed homes.
   

Table of Contents:

1. Introduction
    
2. The Problem of Overpricing
    
3. Psychological Effects of Price Reductions
    
4. Case Study: 148 Glencairn Ave., Toronto
    
5. Comparative Market Analysis (CMA)
    
6. General Market Conditions
    
7. Final Takeaways
    

 

We have all experienced selling something at least once in our lifetime and most of us would agree we tend to overprice the first things ever that we sell. This is when we first discover that what we were pricing stemmed out of greed, to profit more than we should.

However, knowing what to price your home is different since at this stage we have experienced selling things multiple times and we have learned that the best way to price things is the reasonable ones but HOW do you price your home?

This guide will tell you the proper ways to price your home and other things you need to know to price your house the correct way to sell.

The Problem of Overpricing

Overpricing is a common mistake among home sellers. The notion that "I can always lower the price later if I don't get any offers" can be a very big problem. Although it is entirely up to you and it's possible to reduce the asking price at any time you want, this approach often backfires. 

Homes priced too high initially tend to linger on the market, leading to increased carrying costs and potential buyer skepticism.​ And when a lot of potential buyers have seen the frequent price changes, then your chances of selling drop fast.

Psychological Effects of Price Reductions

Frequent price cuts can create a negative perception among buyers. They may assume that something is wrong with the property or that the seller is desperate to sell it and they will ask themselves why, prompting them to make lower offers and then avoid your house in the listing.

This psychological impact can lower the final sale prices that are significantly below the initial asking price since you will notice that no one is interested anymore. As noted by real estate experts, properties with multiple price reductions often take longer to sell and may ultimately sell for less than if they had been priced appropriately from the start.

Case Study: 148 Glencairn Ave., Toronto

This luxury home in Toronto shows how pricing can change over time before a sale. The owners first listed the home in June 2024 for $6.95 million. A few months later, in August 2024, they lowered the price to $6.698 million, and by November 2024, they dropped it again to $6.499 million. After about 150 days on the market, the home finally sold for $6.35 million.

The last time this home was sold was back in January 2007, for $2.525 million. Property taxes in 2024 were $21,094.

This example shows that even beautiful homes in great locations need smart pricing. Too high a price can scare away buyers, and it may take several tries before the home sells. Starting with the right price can help sell a home faster and keep buyers interested.

Source: The Globe and Mail

 

Comparative Market Analysis (CMA)

A Comparative Market Analysis (CMA) involves evaluating recently sold properties that are similar in size, age, condition, and features within your area, and it is a very important tool in determining the right price for your home. This analysis provides a realistic estimate of what buyers might be willing to pay for your home. Real estate agents typically perform CMAs to help sellers establish competitive asking prices. ​Or you can visit our listings for you to view the current market around Okoboji.

General Market Conditions

It's also smart to know what kind of market you're in before selling your home. The two main types are a seller’s market and a buyer’s market. Each one affects how much you can ask for your home—and how fast you can sell it.

What is a Seller’s Market?

A seller’s market happens when there are more buyers than homes for sale. This gives sellers an advantage.

In a seller’s market, you might ask:

• Can I list my home for more than others nearby?
   
• Will buyers compete and offer more money?
   
• How fast can I sell if I price it right?
   
• Do I need to spend money on upgrades or staging?
   

In this kind of market, homes often sell fast and close to (or above) the asking price.

 

What is a Buyer’s Market?

A buyer’s market means there are more homes for sale than there are buyers. This gives buyers more power to negotiate.

In a buyer’s market, you might ask:

• Should I price my home lower to stand out?
   
• Do I need to offer deals like paying for closing costs?
   
• Should I wait for a better time to sell?
   
• Will I have to fix things or update my home first?
   

In this market, homes can take longer to sell, and you might have to be more flexible with your price.

 

 Questions Every Seller Should Ask

No matter what kind of market it is, here are good questions to ask:

• Is it a buyer’s or seller’s market right now?
   
• Are home prices going up or down in my area?
   
• How many homes like mine are for sale nearby?
   
• How long are homes staying on the market?
   
• What are mortgage rates doing right now?
   

A real estate agent can help you understand all of this. They’ll look at the numbers, check local trends, and explain what it means for your home sale.

 

Final Takeaway

Pricing your home right is very important for a successful sale. If you set the price too high, it can scare off buyers and make the home sit on the market too long. Constantly lowering the price can make people think something is wrong with your house. Using tools like a Comparative Market Analysis (CMA) helps you see what other homes in your area are going for, so you can set a fair price. By understanding the market and working with an expert, you can sell your home faster and for a better price.

 

About the Author

Aaron Jones is an award-winning real estate professional, recognized in the RE/MAX Hall of Fame with a Lifetime Achievement Award. As an Accredited Buyer’s Representative (ABR) and Seller Representative Specialist (SRS), he is dedicated to helping clients navigate the home-buying process with confidence. Licensed in Iowa, Minnesota, and Nebraska, Aaron brings local expertise and a commitment to exceptional service.

???? Phone: 712.320.9442
???? Email: aaron@bojihomes.com
????Website:https://www.bojihomes.com/testimonials