How to Price Your Home in Today’s Market

If you’re like most homeowners, making the decision to sell your house brings up a lot of questions. One of the biggest? Pricing. 

More specifically, sellers want to know how to thread the needle between earning the greatest return on what they’ve invested in their home and setting a price that moves the property from “just listed” to “sold” in record-breaking time. 

The best thing you can do for yourself is begin working with a trusted real estate agent right from the start. Don’t attempt to answer the pricing question alone. Instead, have an agent guide you through the process, as they’re experts not only in the market itself but also in determining what home projects are likely to help sellers earn top dollar. 

Then, the question on every seller’s mind then becomes: How do I price my home so that it sells quickly in the current market?

Your agent will be able to confidently say that pricing right is both an art and a science. Accurate pricing in the current market comes down to three easy steps: 1. Do your research 2. Adjust for mitigating factors, and 3. Check your emotions. Keep reading to learn more about how to navigate all three steps with your agent…without losing your mind in the process.

1. Do Your Research on the Current Market

One of the first things your real estate agent is going to mention with respect to pricing your home is “comps.” Comps, also known as “comparables,” tell you what homes like yours in your area have sold for in the recent past. 

For example, if you have a 2,000-square-foot three bedroom, three-bathroom ranch in the suburbs, it will help you to know what other 2,000-square-foot three-bedroom, three-bathroom ranch-style homes in your suburb have sold for in the last six months. It would not benefit you to know what a two-story traditional home with 3,000 square feet in an adjacent neighborhood sold for, since that's not a true comp. 

Your agent will also be well-versed in the micro markets of a particular neighborhood. In Lake Oswego, for example, it could be helpful to have a breakdown of the buyer and seller activity categorized by elementary school boundary. Look for an agent who does these types of analyses and who has a long, storied history of working with buyers and sellers in your area and across the greater Portland market.

Once you know how other similar homes have priced their properties, you can determine how best to price your home within that context. It’s also important to factor in the active and pending listings in your area, since those are the competition your home will be up against until they sell. If you’re already working with a real estate agent, they will pull comps for you. If you don’t have an agent, you can request a Comparative Market Analysis from a local agent to get started.

Another way to look at comps is to peruse digital real estate platforms to determine the pricing trends of your area. The websites of local real estate agents can be helpful, as they will often have a list of recently sold properties. Look for homes in neighborhoods near yours to get a sense of what’s selling right now. If you’d like ongoing insight into your specific property, we’ve made it easy to sign up for market alerts.

You’ll also want to consider the active and expired listings in your neighborhood. The active ones will tell you what price people feel comfortable asking for in the current market, while the expired listings will indicate the homes that weren’t priced appropriately. 

There can be a number of reasons why a home ultimately didn’t sell, but one of the biggest ones is price. If the property didn’t move from listed to sold, an inflated list price usually has something to do with why. This can tell you even more about what the market is willing to tolerate.

2. Adjust for Mitigating Factors

Even an abundance of research can’t account for your property’s unique updates and standout features. After all, not all three-bedroom, three-bathroom ranch homes are created equal. Some characteristics tend to make certain properties more attractive to buyers, and as such, these properties are more likely to sell at a higher price point. 

A trusted real estate agent will know right away what’s a worthwhile investment and what won’t do anything to move the needle. You know you’re working with the right person when they can easily provide a cost-benefit analysis of what makes sense to update and what will yield the highest returns.

With the right agent, you’ll also get access to a  trusted network of people who can help with pre-listing updates. This includes all the contractors, structural engineers and assorted experts who are best equipped to help improve a home’s value and mitigate issues before they become deal breakers in the pending process. This can be a daunting process for sellers to manage alone, so having an agent’s seal of approval can be a game changer.

Another thing to consider is whether you’ve already upgraded or replaced anything significant in the last few years. An updated kitchen or elevated outdoor area, for instance, can be enticing to buyers, and many are willing to pay a premium not to have to invest more money in a property that feels turnkey.  

Similarly, many buyers are looking for peace of mind that goes beyond the inspection report. A new roof, water heater or HVAC system are big selling points—ones that might just allow you to sell your home at a more premium price. 

The best thing sellers can do when pricing their homes is to consider the buyers. Although it can be tempting to price a home based on the seller’s market of pandemic times, higher interest rates mean tighter budgets for a lot of buyers. This doesn’t mean you should undervalue your home, only that competitive pricing is more likely to attract offers than shooting for the moon with your list price and hoping for the best.

There is one way sellers can work their magic with pricing: Psychological brackets. This means considering a real estate website’s search filters and pricing your home in such a way that it reaches as many potential buyers as possible. As silly as it seems, pricing your home at $400,000 means you’ll get less views than setting the price at $399,999. 

3. Check Your Emotions and Aspirations

Step three is the hardest because it requires sellers to check their emotions, aspirations and ambitions at the door. Selling a home is an emotional process, which is why it can be so tempting to set the list price based on the memories you made there, your dreams for the future, and all the work you put into making that house into a home. 

This is completely understandable. Unfortunately, that type of thinking only tricks sellers into setting too-high prices that aren’t in alignment with the reality of the current market. That’s why it’s best to do the research and make adjustments first. This will give you a clear-eyed view of your property’s value without letting your feelings guide your decision-making. 

This is also where your real estate agent can help level-set your expectations. The right agent will be masterful at diffusing emotional selling decisions. You’ll know you’re working with the right person when they treat you empathetically and respectfully, while also understanding the homeowner’s history and protecting their investment. This can be especially helpful in situations where deaths or divorces have contributed to a homeowner’s reasons for selling the property.

All you need to do is trust that your amazing agent has your best interests at heart and wants to sell your home to the right buyer as much as you do. When you work together as a team, you’ll have access to the tools necessary to put that “Sold” sticker on that “For Sale” sign as soon as possible.

Want to get a head start on the pricing process? Find out your home’s value here.