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The home price is right — or is it?

Five strategies to get the most for your property by listing it for the smartest amount from the get-go.

Mortgage rate home buyer illo
With the typical single-family home selling for 96.8 percent of its original list price in February, according to the Greater Boston Association of Realtors, and a typical condo garnering 97.3 percent of its original list price, accurate pricing is critical to a speedy sale.

By Robyn A. Friedman

3 minutes to read

Planning to sell your house in the coming months? If so, one of the first challenges you’ll face is pricing your home correctly. Choosing the optimal listing price is key to a successful sale and is based on a complicated formula — and a gut feeling — that depends on the property’s age, location, condition, the state of the local market, and the home’s value in the minds of potential purchasers.

Price it too high, and you may turn off buyers as the home languishes on the market, resulting in a stigma in which buyers think there’s a problem with the house — or the seller. Price it too low, and you may leave money on the table. So what price is just right?

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“Pricing a house correctly is the most crucial part of the whole selling process,” said Kathy Doyle, an agent with Gibson Sotheby’s International Realty in Chatham. “We call it the sweet spot — the price where you attract as much interest as possible and have more people making offers.”

According to the Greater Boston Association of Realtors, home selling prices continued to soften in February, with the median for a single-family home declining by 7.6 percent year over year to $700,000 in February 2023. This was the largest year-over-year price drop since October 2011. Condominium prices declined as well, with the median selling price dropping 3.1 percent year over year in February to $635,000.

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“As mortgage rates have risen, the buyer pool has shrunk, so sellers can no longer be as aggressive on pricing, bidding wars have become less frequent, and buyers have more room for negotiation,” Alison Socha, GBAR president and an agent at Leading Edge Real Estate in Melrose, said in a written statement.

With the typical single-family home selling for 96.8 percent of its original list price in February, according to GBAR, and a typical condominium garnering 97.3 percent of its original list price, accurate pricing when listing a home is critical to a speedy sale.

Here’s how to find the sweet spot at which to list your home:

  • Know your buyer. “Understand what the buyers’ value drivers are and how your property aligns with those property value drivers,” said Gerald Smith, a business professor at the Carroll School of Management at Boston College. Put yourself in the shoes of the buyers to estimate what the house may be worth to them and how much they will pay for that value.

  • Pay attention to the actual numbers in the list price. Smith said buyers are influenced by the left-most digit in a price. Someone is more likely to buy a house listed for $499,900 than $500,000, he said, because they perceive it to be noticeably lower.

  • Optimize pricing for home-search sites like Boston.com. If a buyer searches for homes less than $500,000, a home listed for that price won’t be included. That’s why Doyle recently listed a three-bedroom, Cape-style home in Chatham — potentially worth about $1 million, she said — for $975,000. It sold days later for $978,000.

    kathy-doyle-chatham-home-pricing
    The home Kathy Doyle sold within days in Chatham. In Greater Boston, single-family homes are spending 20 days on the market on average before selling, according to the Greater Boston Association of Realtors’ February marketing report. For condos, that magic number is 21. – Lukas Scott of Nauset Media

    • Understand the local market. Is your house the only one available of its type, or are there multiple homes on the market similar to yours? The lower the supply, the more in demand your house may be. Price it accordingly.

    • Make it a win/win. Bill Chandler, an agent with Douglas Ellimancq in Wellesley, recently worked with the owner of a six-bedroom home in Newton. The seller needed $1,650,000 to make the numbers work. Chandler listed it for $1,800,000 to allow for a lowball offer. Within a week, the house was under contract. The buyer offered $1,650,000, and the parties met in the middle, at $1,725,000. The seller got more than he wanted, and the buyer thought he was getting a great deal because he got the house for less than the list: a win/win.

    Robyn A. Friedman has been writing about real estate and the home market for more than two decades. Follow her @robynafriedman. Send comments to [email protected].

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    Robyn A. Friedman

    Robyn A. Friedman is an award-winning freelance writer who has covered real estate and personal finance for over two decades. Follow her @robynafriedman.

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