The use of comparables has changed in the Sacramento real estate market. Today they are only important to help discover who your active competition is. Find the three or four most competitive active listings your house will be up against. If there are no significant differences between those listings and your house, undercut them on price. If your home has something the competition doesn’t, a remodeled kitchen or pool, then go with the same price. You want to be the best deal for the buyer and most often that is by pricing less than the competition.
Every home seller wants to get the highest price possible but setting the price too high, even if you are willing to take less, may not be the best strategy.
Buyers in the Sacramento area have large number of homes to choose from and are carefully comparing houses including amenities and price. Four similar homes with three priced in one range and the fourth higher will most often result in the buyer eliminating the higher priced home without making an offer, even though that seller may be the most willing to negotiate. When there are plenty of houses to look at, buyers will skip some listings and only look at homes where they feel they are getting the most for their money.
In today’s Sacramento area market this situation seems to happen more often than it should and may cause homes to sit on the market for long periods of time. With our high inventory levels, listings can become stale very quickly. The first two weeks on the market is the time listings generate the most interest and activity. When homes are on the market for longer than the average time, for a given price range, buyers start feeling hesitant to consider them. It is like the early days in the video rental store where people crowd around the “new release” section and some great movies in the drama isle get no attention. In this situation, it is my experience, even if the seller elects to lower the price, they will likely receive less than if they had started with a lower price.
There is a fair amount of research that indicates pricing a home competitively or at its market value from the start will generally result in getting an amount closer to the asking price. Getting the highest price for a home is best achieved by maximizing the number of potential buyers who see the home and that can be accomplished by avoiding overpricing and undercutting the competition.
A national email survey conducted by House Hunt, Inc indicated that overpricing was the number one mistake home sellers said they made when listing their homes. The margin was nearly three-to-one over the second choice which was “dealing with the same agent who represented the buyer.”
Today the bottom line in setting the price on a house is to use the competition. This increases your opportunity to sell at the highest price possible and in the shortest amount of time.
We specialize serving the needs of buyers and sellers of homes in the Roseville and Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.