Setting a Home’s Listing Price: More Art than Science

By Kevin Shirley, Associate Broker (DC), ASP, GRI, e-PRO

A listing can be a smash hit when the pictures show a cosmetically appealing property, the copy rings true, and the details hit the sweet spot where features and value are a match for the best the area has to offer. But it still might not be as effective as it should be if one other detail is a little bit off. It’s a detail that can cause qualified buyers — those who should be a home’s most interested prospects — to miss the whole show.

I suppose that calling that part of a listing a “detail” is like calling the end score of the NBA’s final playoff a detail — or calling the last vote count in an election a “factor.” It may be just one element of many, but it is uniquely important. In a listing, it’s often the first element that shoppers specify when picking which area homes they will consider. If it’s not thoughtfully calibrated to fall within the parameters they name, the results may suffer considerably.

Of course, the “detail” we’re talking about is the listing price, and choosing the “right” one is the object. We’re looking for a number that will help a home sell quickly at the highest price possible. If the neighborhood comps — the prices paid and asked for nearby area homes with similar features — were all that mattered, coming up with the most suitable listing price would be a cut-and-dried affair. But other factors need to be taken into account.

Some are easy to determine, some … not so much:

The residential market is a moving target, sometimes building from a lower level, sometimes echoing the latest transactions, sometimes losing momentum.

Competitive listing prices reflect either other sellers’ best estimates of that market for their properties, or else their personal opinions of what they think the market should be–but there’s no way to verify which!
The final selling price of any home is determined not only by the seller’s situation but by the buyer’s, also, which is a factor that cannot be determined in advance.

That’s why there are no universally agreed-upon formulas to rely upon. Since there is no way to determine what outcome would have resulted if a different price had been chosen, there’s also no way to verify after the fact if the absolute “best” one was chosen — even if everyone considers the sale a great success! Web titan Zillow says, “If the home sells within a few days of listing, chances are you listed too low” yet if a higher price had been chosen, causing that home to linger for months on the market, it wouldn’t have been listed too low. On the other hand, if the listing price were set to court multiple offers, a quick sale could mean a higher selling price was achieved. There’s simply no way to know for sure.

Put it all together, and you have to figure that arriving at the right listing price is really more of an art than a science. I help clients by pooling my extensive experience, up-to-the-minute market knowledge, and detailed examination of the property’s unique attributes to suggest the range of listing prices I judge most likely to achieve the Holy Grail — a quick sale at top dollar!

If you’d like, we can get together for a no-obligation discussion of your own property’s listing prospects. It’s a great reason to give me a call!