Starting Price Mistakes

The starting price a home seller sets is the foundation to the rest of the selling process. Buyer interest and the speed of sale will depend on the competitiveness of that price compared to similar homes available on the local market.

Setting a starting price too high typically results in a home staying on the market significantly longer than similar properties. Home shoppers are leery of homes that have been on the market too long, and the negative connotations cannot be easily shaken even if the asking price is reduced in the future.

The Risks of Overpricing

Some home sellers assume that overpricing their home is simply a way to gain leverage in negotiations. Unfortunately, that’s typically not what ends up happening. 

Overpricing deters potential buyers from even considering your property, including ones who likely would have fallen in love with your house had they given it a serious look. This ultimately leads to your home lingering on the market longer than other properties, causing home shoppers to wonder if something is wrong with it.

Dropping the price after a long period of disinterest can signal desperation and give buyers more leverage in negotiations. Sellers in this situation have already missed the critical first impression window, which is when people actively looking to buy develop opinions on available properties. In most scenarios, missing this window leads to a loss of momentum and a slow home sale process. 

The Risks of Underpricing 

Overpricing is more common than underpricing. Few homeowners consciously decide to leave money on the table by underpricing. However, home sellers prioritizing speed may be tempted to undercut similar homes in their area.

One of the main issues with underpricing, especially as a strategy to accelerate the sale timeline, is giving home shoppers in your area the impression that your home is low quality or has problems that will require a significant investment of additional funds to fix.

Underpricing can also compromise your negotiating position. You might receive even lower offers based on the perception of the home’s quality and struggle to negotiate above the low starting price. 

Strategies for Setting an Attractive Initial List Price

Comparative market analysis is an important first step for establishing a realistic price range for a home. An experienced real estate professional who is knowledgeable about the market in your area can help you determine the best price range based on your home’s size, location, condition, long-term market trends and seasonal shifts in demand. 

An often overlooked component of starting price decisions, buyer psychology, should also be factored into pricing strategies. Some sellers might try small pricing tweaks, such as undercutting round numbers, to make a listing stand out from comparable homes in an area.

The Difference Between a Starting Price and an Asking Price 

Setting a starting price rather than an asking price is the difference between setting a price floor or a price ceiling in the eyes of home shoppers. A starting price gives home shoppers the impression that this is the initial low price from which offers can be negotiated upwards. An asking price implies that this is your desired high price for your home and is an invitation for buyers to negotiate downward. 

At 72SOLD, we set starting prices that are competitive for an area but not underpriced. Our approach is designed to give home shoppers the impression that the starting price is the floor, not the ceiling. 

Why Pricing Influences the Speed of a Home Sale

A fair price naturally attracts more interest than an inflated price, increasing the likelihood of multiple strong offers. It also creates a sense of urgency, particularly in a seller’s market where buyers may be more willing to compete to purchase a scarce resource.

Setting a realistic starting price can also decrease negotiation time, as buyers are more likely to meet your starting price demands if they believe that price to be fair for the property and area. 

Get Experienced Pricing Guidance from Proven Home Selling Experts

At 72SOLD, our real estate agents have a proven track record of getting our clients multiple competitive offers faster than other real estate companies. Our guidance takes into account market conditions, inventory levels, interest rates and your preferred timeline to ensure our approach aligns with your goals. 

You can learn our valuation for your home by filling out the form on our website.