Pricing Your Home For A Pain-Free Sale [An In-Depth Guide]

Many vendors come into the home selling arena like they’re going into the ring.

They’re defensive and ready for an attack by cheeky buyers who aren’t going to offer them a fair price. It’s not the perfect start to a relationship, is it?

Instead, arm yourself with knowledge and enter with a reasonable price in place and you’ll find selling your home is pretty pain-free.

Buyers are the market. They are the ones who purchase properties and, the ones who write the cheques.

How to price your home

Use the market as a guide

It’s a simple question. Is the price that you’ve set going to appeal to the market? Firstly, you need to know what the housing market is doing. The market falls into one of three categories:

HOT – Great news for sellers as few houses are for sale and buyers are confident and eager. One of the best indicators that a market has heated up is when it appears first home buyers are out there competing with investors.

Knowing how the market is performing at the time of sale is crucial to pricing your home. If, for example, when the market is hot buyers are ready to compete against each other and often spend over the odds to buy their dream home.

EVEN – an equal number of houses to buyers – both sides of the fence are happy and in a good position

In times of an even market, buyers are in the game but they have a little more choice, and competition is not as prevalent. The risk of buyers paying over and above the odds doesn’t happen.

COOL – Buyers are in control yet cautious – a surplus of houses for sale

In a cool market, buyers are cautious and looking for a bargain and the best value. They can be choosy and take their time as there are more properties to choose from. If you’re selling in a cool market, it’s the sellers who compete against each other – go with the wrong price or scrimp on presentation, and you’ll be out of the game.

Compare to similar properties

There’s a straightforward way to know how to price your home: look at similar homes to yours that have SOLD in your area in the three to six months and note how much they sold for.

The prices that these homes sell for is the best indication of what you can expect to achieve. Similarly, don’t price your property against a property that hasn’t sold.

All too often, I learn that a seller has decided that their home is worth more than what the market dictates, sometimes way more than that similar property did or didn’t sell. I know why they do this; they let their emotions get in the way of the price. They built their house, or they loved living there, so surely a buyer will pay more for that, right? Wrong.

Remove the sentiment and see your house for what it is – the number of rooms, the land, the location, the age, the condition, the amenities and, the ticket to your freedom.

Of course, the other emotion that gets in the way is greed. While it’s tempting to overprice your house and see what happens, it tends to backfire. Buyers know the market well; they’ve spent weeks researching and can smell an overpriced house a kilometre away. You’ll receive a lukewarm reception at best with few people turning up to your open home or even be greeted with the dreaded ‘deafening silence of the market’.

Another typical ‘game’ that sellers like to play is spending time researching the right price by looking at similar homes, asking an independent valuer or real estate agent to price the home and then adding another five figures to the price for negotiating or ‘wriggle room.’ Adding an extra $10, $20, or $50k of negotiation space overprices your house. Buyers won’t be interested.

Ensure your pricing sits in the right place

Some sellers are adamant that they want just that little bit more for their home, and tweak the price so that it falls into a new price range. For example, a seller tries to push his house into the $500,000 price range (even though it’s worth a high $400,000).

The problem here is first that most buyers who search for a property online will use a search field that allows them to search by price range, so guess whose property isn’t going to appear? Secondly, it’s the psychology of numbers. For buyers who are busting a gut to raise $490,000 going over in the ‘5s’ is way too much.

I know of a seller in South East Queensland who was stuck selling his house. He had it on the market for four months at $500,000+, and he didn’t get any serious bites. Then, he adjusted the price into the ‘4s’ and bang, suddenly people showed up, and he ended up selling for $490,000.

If you price your home on the cusp of two big numbers, take care to pick the price that you’re happy with but will also attract a happy buyer. Buyers can smell an overpriced house from afar, and they won’t come near it.

So, as pricing is a bit of a game, is it a good idea to leave the price off your listing?

Let me think about this one. NO!

Save yourself a lot of aggravation and time spent answering the ‘how much is your home?’ question by including a price. Failing to do so will do one of two things:

Buyers will become suspicious because they’ll wonder why you haven’t shown an amount and suspect it’s too much.

Nothing. Buyers will look elsewhere.

It’s your job to entice buyers to your home, so make it easy for them to like you and your house.

“Sellers set the price, but buyers determine the value.”

Is it a good idea to get a property valuation?

Everyone has an opinion on house prices, especially those who have no idea what they’re talking about.

Tempting as it might be, I advise you not to take advice from everyone you know.

The sage butcher and Ted across the road are wonderful for meat and sharing footy tips, but they are not qualified, property valuers. Unless, of course, the butcher’s side hustle is in real estate, or Ted happens to have sold ten houses in the last six months – let their advice waft over your heads and stick with the experts and your research.

If you want a reliable and legal valuation of your home, it pays to use an expert. The first option is to use a certified property valuer. These experts are required by law to price your home correctly, and would not risk ruining their reputation and livelihood by doing otherwise.

Property valuers will compile a pre-sale report which shows how the market is performing and justifies the pricing of your home. To begin with, they undertake a thorough investigation of your property, from the inside and out. They will measure, they will poke, and note any faults and improvements. They also do the basics, such as recording the number of rooms, bathrooms, layout, fixtures and fittings, carports, garages, sheds, decking areas, and so forth.

They will also look at the property from outside, noting the topography and positioning from the frontage and its locations and zoning (crucial if you want to show that you’re in a catchment zone for schools). Finally, they take photographs that are dated to identify when the inspection took place; this assures buyers that the pictures aren’t years old or doctored.

The property valuer will then compile a legally binding report. It will include details about the property title, the land and all their findings in regards to measurements and layout. A pre-sale report will also identify the local market, recent sales and current listings, and use this as evidence to support their valuation.

How else can you value your property?

Why not ask a few local agents to come to your home and give their opinion on its price? I will warn you though; you should make it clear to agents that you are selling your home, NOT your listing. ‘Buying’ a listing is still an unfortunate industry practice.

Some unscrupulous agents will ‘beef up’ a price to inflate their own bulging pockets (and your ego). Don’t fall for it, because the buyers certainly won’t. If you ask three or so agents to come and value your home, you can lay all the estimates on the table and use these as a gauge.

For your research purposes, as well as following the local market and seeing how much properties are going for (online, agents’ windows and in papers), you can use online platforms such as Price Finder or Core Logic.

Core Logic has developed a Hedonic Price Index which measures the day to day property market movement and prices. It can be a little confusing, so I take my hat off to you if you can understand it!

What the right price means (and doesn’t mean)

If you’ve done all your research, you’ve used experts and followed their advice, and you’ve marketed your property at the right price – everything looks set.

Now, it’s a matter of holding your open homes and by appointment inspections. What it’s not time to do is PANIC.

Yes, you want to sell your home quickly, but you also don’t want to lose unnecessary amounts of money, and by unnecessary, I mean thousands and thousands of dollars. That’s why I advise clients to remove the word ‘DROP’ from their vocabulary.

If you find that your property is not selling and from feedback from viewers it appears that you may have ‘overshot the runway’, you can consider adjusting the price. Note, the term ‘adjusting price to meet the market’ rather than PRICE DROP is far more palatable. The latter suggests bargain basement and desperation, while adjustment shows you’ve reassessed based on market research and feedback.

Remember, marketing using professional and carefully chosen wording is essential to your price and getting a sale!

Don’t be on the wrong side of the fence when you sell your own home

One of the biggest pricing conundrums facing any seller, especially in the lower to mid price ranges ($400,000 – <$1million) is, “which side of the BIG number (fence) does my house sit?”

I’ll give you a couple of recent examples to explain.

A member, selling his own home privately in South East Queensland, listed it in the low $500’s.

Modern, stylish, spacious, nice neighbourhood – just the house that everyone was looking for …

Or were they?

For over four months, this member received little enquiry.  There were a few luke-warm inspections and definitely no offers.

After taking a closer look at recent local sales and some advice, the member adjusted his price to ‘Offers Over $485,000’. (Be aware that ‘Ofers Over’ type of pricing is not allowed in NSW & VIC)

Within a week he’d had seven inspections and eventually agreed on a price of $490,000 – SOLD!

This was a typical case of hanging onto the BIG number to for too long.  That number being the ‘5’ as in $500,000+

The difficulty for sellers whose properties sit on the cusp, is, do they jump the fence to try and get the big number (grass is greener?) or get the sale done by staying on the ‘right’ side of the fence?

Another member just called me in the same predicament. She is about to list her property and it sits on the cusp (fence) as well.

Local agents told her to leave the price off for the first couple of weeks, and then put a price on it after they had spoken to some buyers.  She decided to sell your own home option but took the advice from the agents – leave the price off.

My response?  That is utter crap!  Buyers want to know how much you want.  They need to see a target.  The only enquiries she would get for the first couple of weeks under the ‘no price’ campaign would be buyers asking, “How much do you want?”

So instead of grazing for too long on the wrong side of the fence, she decided to stay where the grass would be more plentiful and call for ‘Buyers From $*99,000’.

This is a pricing strategy that actually engages buyers and entices offers.  From the sellers’ perspective, it’s a case of, “The only way is up!”

In my experience, I have seen too many sellers graze on the wrong side, or sit on it  for too long and lose valuable time and money, yet it is such a simple and powerful psychological issue to fix.

Answer this –What is the actual dollar difference between $601,000 and $599,000?

That’s right $2,000!!!!

To a buyer this means everything.  A major psychological barrier can be overcome and massive amounts of time and effort saved for an adjustment of a couple of thousand dollars!

And understanding that can be the difference between four to six (or more) agonising months on the market, or a month of constant interest and offers – leading to a great sale.

Don’t get caught on the wrong side of the fence.  The buyers will be leaping over your side if you get the price right the first time.





Your home hasn’t sold? The REAL reasons properties don’t sell & what to do about it

How many reasons or excuses can your rattle off as to why your home didn’t or took an eternity to sell?

Phil Spencer, the likable Pom real estate ‘guru’ says in the trailer of his show, “There’s a thousand reasons why a home doesn’t sell.” Sorry Phil, you’ve overshot the truth by about 997 reasons.

You’ve heard it here ladies and gentlemen, there are actually only THREE, well three and a half, reasons a home or property languishes on the market or frustration gets the better of the sellers and they take it off the market.

Whether you are selling your home privately or through an agent, these are the immutable laws of whether or not you are going to be slapping that SOLD sticker up or, like a beaten favourite, dragging the ‘For Sale’ sign in and using the backside of it to advertise the upcoming school fete.

The best thing about these immutable laws is that they are controlled by one person or group of people – the sellers, the owners of the home or property being sold. Yep – you have total control over these laws and can fix or adjust them at any time. And to make it easy to remember, they all start with the letter ‘P’.

PROMOTION: Reaching and attracting buyers

You can’t sell a secret. Always think of promotion (advertising) like this –

Who is the likely buyer(s) for my home? Where will I find them?

A hint for part one is, they are likely to be just like you were at the time you bought the home, and part two – it’s nearly ALL online baby!

Buyers follow property, not agents and 95{5be8b5650852dcf96a34828ba5a88d9285f6c7439f02c8133f6b05e7d943eaff} of those buyers are searching, researching and shopping online. The advertising resources you need to promote your property are almost identical if you decide to sell your own home or hire the services of an agent.

Always think BIG online as it costs a fraction of print media which now only accounts for less than 5{5be8b5650852dcf96a34828ba5a88d9285f6c7439f02c8133f6b05e7d943eaff} of total buyer enquiry.

PRESENTATION: Impressing buyers

Is the home or property Clean, Uncluttered, Tidy, and Smelling nice? – C.U.T.S.

There is no quicker way to repel a buyer than to present an untidy, cluttered, unloved home. If you don’t show that you love it, the buyer won’t either.

If it doesn’t CUTS it, you are definitely handicapping the chance of a quick, well priced sale.

Inside and out, it needs to look its absolute best.

PORTRAYAL: Attracting and meeting the expectation of buyers

Portrayal is the half a reason – extending on both presentation and promotion.

Do the images (photos) and description match what you have to offer?

Did your 16 year old niece who studied photography at TAFE for three months take six brilliant shots of the birdbath? Is the washing up still on the sink of that ‘Chef’s kitchen’ that you had installed a year ago?

One of the biggest repellents for buyers is too few photos, or poorly taken images. Four is NOT enough and thirty four is too many. The optimum number to show online (where ever buyer looks) is around 12-15 shots.

I strongly recommend hiring pro- property photographers and make sure they don’t ‘overstate’ your home. Buyers hate turning up to what they believe is the Taj Mahal and finding the Taj Mahole. Be honest and accurate with your portrayal.

Do you want to hear the biggest and often the most ignored reason why properties take ages to sell or simply don’t?!

PRICE!: Attracting and providing value for buyers

No matter if a market is hot or cold. If you over price your home or property, based on the informative power of the web, buyers will give your home a wide berth and continue to look for better value amongst your competition. And always remember this – you will always have competition.

This has been proven time and time again. Price can stop a train.

This one law would account for over 90{5be8b5650852dcf96a34828ba5a88d9285f6c7439f02c8133f6b05e7d943eaff} of stagnant or unsold properties.

A lovely client of mine called just a few days ago and asked the $64,000 question, “Craig, why hasn’t my home sold? I haven’t had anyone come to see it?”

We agreed that the other 2.5 laws had been satisfied, however, it was bleedingly obvious that the seller had overshot the runway on price, although she did try to reach for some of Phil Spencer’s imaginary 996.5 reasons why a home doesn’t sell.

She was priced at $640,000 and we agreed that a change to ‘Buyers from $600,000’ might help things along. We made the change. Within 24 hours she had her first genuine enquiry.

That horrible term ‘Drop the Price’ does not need to be used – ever. Adjusting the pricing strategy is what it’s all about. In most cases an adjustment of 2-3{5be8b5650852dcf96a34828ba5a88d9285f6c7439f02c8133f6b05e7d943eaff} and a change of how you express the price is all it takes to get buyers moving.

I have written so much about this very subject, and this hugely important law can have significant impacts on the expectations and psyche of sellers everywhere. For Agent in a Box members, you will find a video on the subject in the members area.

So there you have it, 3.5 reasons why a home or property doesn’t sell. These laws won’t change. Observe them and your next real estate selling experience will be much happier and smoother.