I may be a third generation real estate professional, but I’m also a data nerd. Over the last 20 years of watching my mother sell real estate, and during my own tenure, I kept seeing the same pattern play out- homes that were priced correctly from day one consistently sold faster and often for more. Pricing a home is both an art and a science, but I wanted to dig into the science a little deeper, searching for data to back up my theory that overpricing your home can often net you less than if you had priced it at or just under market value to begin with.
Perceived Value= Potential Bidding War
Let’s say you are hoping to net $850,000 for your home, so you decide to price it at $900,000, assuming potential buyers will negotiate down to $850,000. Behavioral economics and real world data have my back on this not being a winning strategy. When you overprice, fewer buyers even look at your listing. It sits on the market, you start doing price drops, and stigma builds. Buyers wonder, ‘what’s wrong with it?” and assume they are at a stronger place to negotiate the longer a home sits on the market.
But if you price your home correctly (attractive vs the comps - say $849,000 in this scenario), you create more buyer interest and foot traffic. By pricing to perceived value (or just under), you create a sense of urgency that can spark multiple offers and, in some cases, lead to a bidding war in which buyers compete above asking to win. We can’t guarantee this, as the market (buyers) are the ultimate deciders of value, but we have witnessed this strategy work hundreds of times.
Time Is Money
According to real world data, if a home is sold:
in the first days, these homes sell for about 98–99% of the list price
in 31–60 days: you net about 95% of the list
in 61–90 days: you net about 92% of the list price
after 91 days: you drop to 88% of the list price.
Every extra day on the market isn’t just a lost opportunity to maximize your net- it’s additional money out of your pocket in the form of carrying costs, staging fees, and mortgage payments.
Pricing Strategically For Alexandria
Alexandria buyers are savvy. They’re watching comps, they’re calculating the price per square foot, and they’re using every online tool available to decide whether a home is worth a tour.
If your home is priced even slightly above what the market will bear, it can quickly be missed by potential buyers, especially in digital searches where buyers have to input a price cap. For instance, a home listed at $1,005,000 won’t even show up for a buyer searching “up to $1,000,000.”
What we witnessed during the Spring market in Alexandria is listings that were priced correctly usually went under contract before the first open house, at our over list price. Few things are more gratifying than watching pricing strategy translate directly into real-world results for our clients.
While the list price of a home is ultimately the client’s decision, successful pricing comes from understanding how buyers think and creating momentum around that. When your pricing strategy is rooted in psychology, market data, and experience, it’s a winning strategy.
If you’re considering selling your home in Alexandria, we’d love to partner with you to craft a pricing strategy that’s both data-driven and tailored to your goals. Reach out to us with any questions you may have about the process.
