Sept. 29, 2022
No matter what the market is like, it’s always important to price your home appropriately. Even over the past few years, when houses were all seemingly selling over asking price within hours of hitting the market, you couldn’t sell your house for more than buyers were willing (or able) to pay for it. But there was a little more room for error when listing a little too high.
However, the market is shifting now, so that wiggle room is tightening up, and you have to pay closer attention to your pricing. That doesn’t mean prices have tanked; houses are still selling for record highs.
But, as this Realtor.com article reports, a recent survey done by Cinch Home Services revealed that 51% of buyers backed out of contracts in the past year.
Some of the reasons buyers gave for backing are nothing a seller can do anything about, like:
- Buyer’s financing falling through due to rising rates
- The buyer lost a job
- The buyer took on too much debt before closing
But some of the factors are within your control as a seller, such as:
- A low appraisal
- Buyers finding a better deal on another house
You can’t control how much buyers are willing to pay for a house, how much other sellers are asking for their house, or how much an appraiser will say your house is worth. All you can do is be aware of current pricing trends, and be willing to adjust yours.
So here are some things you can do to make sure your house is the one buyers choose to buy, and keep your deal together all the way to the closing table:
Be aware of other sellers’ pricing
What other houses would a buyer interested in your house consider? Keep a close eye on the prices of competing homes on the market. And that doesn’t just mean right in your neighborhood, or even town. Most buyers aren’t dead set on just one area, and could easily choose to buy another house they feel is a better deal. So make sure you’re aware of any house that gives yours a run for the money.
Also pay attention to how much houses recently sold for, because those are what appraisers use to come up with their valuation. If you based your listing price off of data from two or three months ago, and houses closed for less since then, it could affect how an appraiser values your house.
Be willing to budge
If you see other sellers dropping their prices, consider lowering yours as well to ensure that you’re an attractive option to buyers in the market.
If you have an interested buyer whom you sense is considering other houses, you may want to indicate that you’re willing to negotiate.
Even if you have a firm deal with a buyer who is trying to back out because they found a better deal, you might want to renegotiate rather than stick to your guns. It’s better to hang onto a buyer for a little less money than it is to lose one altogether.
And if you have a firm deal with a happy buyer, only to find yourself dealing with a low appraisal mid-way through the transaction, you probably should consider adjusting the sales price down as well. You can see if the buyer will make up the difference, but in this shifting market it probably won’t be something buyers are as willing to accommodate as they were recently.
It might sound like bad news for sellers—and some sellers will refuse to adjust and budge—but the chances are you can still sell your house for more than it was worth a year or two ago. You’re better off capitalizing on that by budging and selling now, rather than holding firm only to find that prices drop even more in the coming months.
While sellers always need to be careful about pricing their house appropriately on the market, the past few years were more forgiving if you made a mistake.
But the market is shifting and many sellers are losing deals they could have saved if they were willing to adjust their price.
While it may not sound appealing to take a lower price, you’re most likely able to sell your house for more now than you could have a year or two ago. So before you dig in on your price, consider whether it’s worth the risk of values dropping even more in the coming months.