So you are ready to list your home and your Realtor has put together a market analysis. He or she may have given you a maximum price range that they believe is the top end of the market for your home and you decide to list it just above that number. But there’s one more thing that you need to consider before determining that price: Price Points.
When determining the list price for your home, you need to picture yourself as a home buyer. Most home buyers will pick 2 price points and will ask their Realtor to show them homes within that range, say $400k - $450k. Savvy home sellers will use price points like this to gain maximum exposure for their home.
Let’s dig a little deeper.
Home sellers automatically assume that if their home is listed in MLS then all home buyers will see it online. This isn’t accurate. Most home buyers will ask their Realtor to setup a custom search that will use price points as a search criteria. If your home is priced at $452,000, then you will not get any exposure to buyers that have set their maximum search amount at $450,000.
Most home buyers at the lower end of the market, say $200k - $400k will use $25k increments in their search criteria. Buyers above this range may use $50k increments.
Here’s a scenario:
Let’s say that you need to sell your home for $287,000. The price points for this price range will be $275k - $300k. It would not make sense to list your home for $305k because you would not get any exposure to home buyers that have capped their search at $300k. The optimal list price would be $299,900.
Your Realtor will use market data along with price points to help you determine the best list price for your home. He can analyze the number of sales within these price points to determine the optimal exposure. Your Realtor will also understand the common search criteria on the numerous web portals that will help achieve max exposure.