For years, homeowners could list their property at an ambitious price and hope the market would catch up. In many cases, it did.
Today’s market is different. Higher mortgage interest rates have changed how buyers shop, how much they can afford and how sellers need to think about pricing.
I like to think of pricing strategies in three categories.
The first is aspirational pricing. This is when a seller prices their home based on what they’d like to get rather than what today’s buyers are actually paying. While it’s understandable to want top dollar, aspirational pricing often leads to fewer showings, longer days on the market and eventually price reductions. By then, buyers start wondering what’s wrong with the property.
The second is market value pricing. This means pricing your home where recent comparable sales and current buyer demand indicate it should be. A properly priced home attracts qualified buyers quickly and has the best chance of selling within a reasonable timeframe.
The third strategy is invitation pricing. This involves listing just below market value to encourage more showings and potentially multiple offers. It sounds counterintuitive, but creating competition often produces stronger results than chasing buyers with an inflated asking price. Buyers are already stretching their budgets because of interest rates. When they perceive value, they’re more likely to act quickly.
If your home isn’t selling, your first instinct may be to cut the price. Sometimes that’s necessary, but it isn’t always the smartest solution.
Let’s say you’re prepared to give up $20,000 anyway. A $20,000 price reduction spread over a 30-year mortgage often changes the buyer’s monthly payment by only a relatively small amount. While every situation is different, the monthly savings from a price cut may not be enough to convince someone who is already worried about affordability.
Instead, consider using those same dollars to help buy down the buyer’s mortgage interest rate. A seller-paid interest rate buydown can reduce the buyer’s payment immediately, making the home feel significantly more affordable each month. In today’s market, monthly affordability often matters far more than the purchase price itself.
Finally, don’t overlook the things that cost little or nothing. A spotless home, clean windows, fresh landscaping, decluttered rooms, neutral décor and excellent photography all help buyers picture themselves living there. First impressions matter, and many homes can become more competitive without major renovations.
Selling in today’s market isn’t about chasing yesterday’s prices. It’s about understanding today’s buyers. The right pricing strategy, paired with thoughtful presentation and the right incentives, will almost always outperform wishful thinking.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs, and the surrounding mountain communities. Reach her at (909) 442-1345 visit www.HomesInLakeArrowhead.com, and follow her on social media @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
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