How Sellers Set Their Asking Price

When you’re considering how much to offer for a home, it’s helpful to understand how sellers typically decide on their asking price. Here are four common pricing strategies you’ll start to notice as you view homes:

    1.    Clearly Overpriced

Some homes are priced 10-20% above their true market value. Why? Sellers want the highest price possible, and sometimes agents inflate the listing price to win the seller’s business. Unfortunately, overpriced homes often sit on the market for months, leading to:

    •    A perception that the home is “troubled,” which can result in lower offers.

    •    Ongoing hassle for the seller to keep the home “show-ready” with little to show for it.

    2.    Somewhat Overpriced

This is the most common scenario—around 75% of homes are priced 5-10% higher than they should be. This happens when:

    •    Sellers genuinely believe their home is worth more than the market suggests.

    •    Sellers leave room for negotiation.

While not as extreme, this strategy still leads to longer market times and often lower final sale prices.

    3.    Priced Correctly at Market Value

Some sellers base their price on a thorough analysis of comparable homes and market conditions. These homes sell within a reasonable time frame and usually very close to the asking price.

    4.    Priced Below Market Value

Motivated sellers looking for a quick sale may price their homes below market value. These homes attract multiple offers and typically sell quickly—often at or above the asking price.

Tips to Save Thousands When Buying a Home

When buying a home, most people aim to:

    1.    Find a home that meets their needs and desires.

    2.    Purchase it for the best possible price.

Successful buyers often follow these steps to save thousands:

    1.    Know What You Want

It sounds simple, but many buyers don’t have a clear idea before they start searching. Keep in mind, there are two types of homes competing for your attention:

    •    The one that meets your needs (e.g., size, location).

    •    The one that fulfills your wants (e.g., fancy kitchen, large backyard).

Your goal is to find a balance, but prioritize your needs first to avoid buyer’s remorse.

    2.    Keep Your Focus

Don’t let excitement cloud your judgment. While it’s great to fall in love with a home, make sure it meets your practical needs first. If it also fulfills your desires, that’s a bonus!

    3.    Leverage a Buyer Profile System or House-Hunting Service

Look for an agent who offers a system to match your criteria with all available homes on the market. These services provide ongoing updates on listings that fit your needs, saving you time and effort in your search.

Understanding these strategies and tips can help you make informed decisions and save money on your home purchase!