Correctly pricing your home is critical for a speedy sale. Correct pricing has, in fact, been called the most effective marketing strategy you can use. But it can sometimes be quite a challenge to determine the correct price, especially when you see prices for similar homes all over the board. There are, however, some effective strategies and tools you can use to arrive at the best price, both in terms of a quick sale and the most money in your pocket. Take a look, then, at this brief step by step guide to correctly pricing your home in Los Angeles.
Run a CMA
A comparative market analysis (CMA) is probably your best tool for correctly pricing your home in Los Angeles. This is a compilation of sale prices for comparable homes recently sold within your neighborhood and immediate area.
You can run a CMA yourself or have your agent do it for you. If you do it yourself, you’ll want the properties whose sale prices you compare your home against to meet the following criteria:
- Located within half a mile of your property
- Listed within the past three months (six at the outside)
- About the same age as your home
- With almost the same square footage (no more than 10% difference) and nearly the same features
Price Strategically with Price Banding
Price banding is a valuable strategy for correctly pricing your home in Los Angeles because it involves determining a less crowded price point. Typically, home prices in an area tend to bunch together within a fairly narrow range. The trick then is to price outside that range within a different – and so very noticeable and appealing – price band. So, for example, if many of the homes around yours are selling for, say, $122,000 to $124,000 and many others for $127,000 to$129,00, you could price within that untaken band – $124,000 to$127,000.
Price for Online Searches
Because over 90% of younger home buyers are searching online, a critical component of correctly pricing your home in Los Angeles is pricing for online searches. The main thing to keep in mind here is that most online listing sites have upper and lower parameters for searches with respect to price. Buyers, for example, will set a minimum and maximum for the price when they conduct a search. If your home falls outside that range, those buyers will never see your listing because the site won’t serve it up to them. Find the likeliest price range for your home on these sites, and price within that range.
Consider Market Variables
One aspect of correctly pricing your home in Los Angeles that many people overlook involves considering and factoring in certain market variables. These include:
Some seasons are simply better for selling homes, with spring usually considered the best. So if you’re selling during a hot (market-wise) season, you can ask a higher price. If, however, you’re listing during a slower season, then you will probably have to lower the price.
This is basic supply and demand. If the inventory is high (more houses on the market), you’ll have to charge less. But if inventory is low (more demand than supply), then you can raise your price.
STATE OF THE MARKET
Correctly pricing your home also involves a careful look at the state of the market. What you have to determine is whether it is a buyer’s, a seller’s, or a neutral market.
The Best Way to Price Correctly
So correctly pricing your home in Los Angeles can be a complicated affair with several ways to reach the goal. And then you have to take into account the peculiarities of the local market, where things may not align with the larger trends. Your best bet then is to lean on your qualified local agent to arrive at a correct price. We can help.