When selling your home, one of the most important tasks you have is to price your home right. Determining the correct market value of your home is a big task — and if you want to streamline your selling process, you need to ensure that you price your home right from the very beginning of listing marketing.

Why Do You Need to Price Your Home Right? 2 Reasons

Here’s what you need to know about why it’s a crucial home-selling success strategy to price your home right since step one.

#1. To Attract Serious Eligible Buyers

When most buyers are shopping for a home, they’re using some kind of online MLS service that populates lists of available properties in their target markets.

When using any online tool, it’s common that buyers will first set a search filter to help them narrow down the options — which allows them to save time and prevent wasted energy looking at homes outside of their price range.

Since many buyers are searching for homes with price points as the north star, your home's price needs to be accurate if you want to attract eligible buyers. If the price is not right, you could miss out on an entire group of buyers who otherwise may be interested in making an offer on your property.

When you price your home right, you’ll be gaining the visibility that’s crucial for you to strategically market your listing to the proper pool of buyers.

#2. To Prevent Financing Issues Down the Line

Another reason why it’s important that you price your home right from the get-go is to mitigate the risk of financing issues that could inhibit your transaction.

When a buyer makes an offer, they’ll be working with their agent to come up with a competitive purchasing amount based on the price that you’ve listed the home for.

The buyer pitches the offer to the seller when they officially submit the offer letter. If the seller is interested and chooses to accept, the two parties enter into a preliminary stage of negotiations until they come to a common ground — at which point they can move into escrow.

Here’s the catch that relates to how you price your home right as the seller. Even if the buyer and seller have agreed on a certain purchasing price, there’s still the official appraisal process that will be conducted as one of the first steps of escrow.

While appraisals are generally required as a contingency clause in all transactions, if your buyer is funding the purchase with a mortgage, an appraisal will be required by the lender.

If the certified appraisal determines that the fair market value of the home is different than the agreed-upon purchasing price, your transaction may hit a roadblock.

To protect their own interests, lenders generally do not lend out more than the fair market value of the home to their borrowing buyers.

In these situations, the buyer would either be required to pay the difference out-of-pocket, take out an additional loan to complete the purchase, re-negotiate the purchasing price, or back out of the deal altogether. The options that buyers have to work within will depend on the specific contract contingency clauses.

Since this can cause an unwanted riff in the pace of your transactions, it’s better to try and price your home right from the start — being as close to the fair market value of the home as possible.

Price Your Home Right Best Practice? Work with a Top Agent in Your Market

While it’s not necessarily conventional, it’s possible for sellers to pay for their own property appraisal before they create a listing to ensure that they are setting the right price from the start.

However, if you work with a top agent, they will be able to guide you through the process of pricing your home based on their market knowledge, expertise, and experience.

One way that agents are able to calculate an appropriate price for your listing is by reviewing comps, often called comparables. A comparable is a home with similar features to the one being sold in the same area.

By viewing the transaction information of similar homes that are located nearby your listing, an agent can glean insight into how much your home will be appraised for.

Now that you know how important it is to price your home right from the beginning, you may be eager to get in touch with a top-selling agent in your community. To find your perfect real estate agent match, head to RealEstateAgents.com.