Pricing your home correctly is absolutely critical to obtaining the highest price possible for your home. The results of under pricing your home could mean leaving money on the table, and the results of overpricing your home can mean that it languishes on the market and eventually ends up bringing in less money that pricing correctly in the first place. Many homeowners price their home based on what they need out of the home or based on recovering the costs of improvements they made in the home. Truth of the matter is that the correct price is based on what a buyer is willing to pay for the home, and that can be affected by competition from similar homes, recent sales of similar homes and current market conditions. The following Diagram is a great way to look at how to price your home correctly.
Over priced -poor condition and poorly presented will cause your home to sit on the market and lose value over time. It is natural for a home buyer to ask why has that home not sold yet? There must be something wrong with it. Just outside of the market- Many seller believe that pricing your home just outside of the market gives you room to negotiate and get the actual price that you want to obtain. Generally this helps sell your competition that is priced more aggresively and leads to you having to make price reductions to sell your home. Again time is not your friend as the longer your home stays on the market the home buyers begin to think that there is something wrong with your home. In the market - Is where you want your price to be as this will cause the highest level of activity and in many cases even create multiple offers and a bidding war that drives your price higher than the asking price. Homes that are in great condition, properly marketed and priced correctly generally sell the fastest and for the most money in nearly every market condition.