You can't have your cake and eat it too

Why It's Important to Price Your Home Correctly

This story rings true for so many sellers that it pains me to say, "I told you so" when they don't take my advice. First off, you need to watch my video before reading this. But if you're against seeing me on camera, I'll explain in more detail why it's so important to list your home at the proper price in Charlottesville and the surrounding cities.

Real-World Truth

This home was listed by the surviving children of a very nice lady who had lived in it for many, many years. The family agreed to list the home for $550,000 in August 2024. This was an especially bad time to list because it was right before the Fed was set to decide whether to lower interest rates for the first time in 18 months or keep them elevated. As a result, many buyers hesitated, thinking, If we wait, we might get a better interest rate on a mortgage.

So what happens when a home is listed for $60,000+ above market value in a slow market? It sits. And it sits. Then it gets a price reduction—and sits some more.

My Buyer’s Offer

Now here comes my very savvy buyer. He likes the home. He sees the potential of a basement apartment. He knows he can handle the renovations required to make it his own. But the price! The only reason we even considered the home was because of the recent price drop from $550,000 to $520,000.

Both he and I knew it was still overpriced, but he said, Let's offer market value and see what happens. We put in an offer for $465,000, and the listing agent responded, "Nope. Sorry, they won't accept." And that was that.

Now, mind you, this was October. The home had already been on the market for two months. The seller could have countered, but instead, they deemed our offer too insulting to even consider negotiating.

What a Proper Pricing Strategy Would Have Done

If you watched my video, you know that the home sat for another four months before selling for $470,000—a mere $5,000 more than our offer. So how could this have been better for the seller?

There are three pricing strategies I implement with all my sellers:

1. Aspirational Pricing – This is when the home itself is famous or has a unique characteristic that makes it worth more. Perhaps a celebrity lived there, or it's a hidden A-frame cabin in the woods that's the perfect vacation home. That’s the only reason to list above market value.

2. Market Value Pricing – If you want fair and honest offers, list your home at market value. You'll most likely receive a fair and reasonable offer in line with that price.

3. Below Market Value Pricing – This is my favorite strategy. It involves listing the home just under market value to generate a lot of interest, attract multiple offers, and ultimately drive the price up.

For example, if this seller had listed their home properly at $475,000 back in August, they likely would have received an offer from my buyer for $480,000—$10,000 more than what they actually got. Instead, they started with an aspirational price of $550,000, and the home sat unsold for months.

This is why it’s crucial to have these conversations before listing your home. Pricing it correctly from the start makes all the difference.