The Goldilocks Principle In Pricing Your Home To Sell


The Goldilocks Principle In Pricing Your Home To Sell
By Scott Rogers • August 2, 2023
Per Wikipedia... The Goldilocks principle is named by analogy to the children's story "The Three Bears", in which a young girl named Goldilocks tastes three different bowls of porridge and finds she prefers porridge that is neither too hot nor too cold, but has just the right temperature. Let's see how it applies to pricing your home to sell... Too High If recent comparable sales point to a value of $475K for your home... and you price it at $495K, you are unlikely to sell it quickly or for a great price, as you priced it too high. Buyers may come to view your home... but if they conclude that it is worth $475K, they'll be faced with a decision of whether... [1] to offer $475K (which will likely result in a counter offer from you that they will not accept), or [2] to offer $455K (which you likely won't counter at all), or [3] to not make an offer at all. Most buyers these days, in this market, don't make the offer at all. Thus, pricing your home too high, likely won't work out well for you. Too Low Arguably, this strategy isn't terrible, or at least not as bad as pricing your home too high. If recent comparable sales point to a value of $475K for your home... and you price it at $450K, you are likely to sell it quickly, but not necessarily at a great price. If there are enough buyers in the market when your home is listed for sale, perhaps you'll have multiple offers that will drive the price up to $475K or a bit higher... but if there is only one buyer in the market, they'll probably offer $450K and you be selling for less than you might have otherwise expected. Just Right This is right where we want to be. If recent comparable sales point to a value of $475K for your home, you should likely consider a list price somewhere between $472,500 and $479,500. Buyers who come to see your home in the first few days, or first week, will find it to be priced appropriate given recent sales, and will likely feel comfortable making a full price offer. Perhaps you are even more fortunate, and there are several buyers in the market and there are competing offers with escalation clauses. Your best strategy in the current market (and perhaps in nearly every market) is to price your home just right -- not too high, not too low -- just right -- in line with recent comparable sales. Receive Updates by Email
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Dec 23, 2024 (unless otherwise noted).
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