Pricing Your Home to Sell: Let Market Trends Guide You

In this post, we’ve compiled expert insights on pricing your home to sell. Check out our steps below to help set a price that will attract buyers and maximize your resale value.

Start with an instant home value estimate

Detailed property data is widely available online. Sellers now have a head start with the ability to do more preliminary research and access information about their home in an instant, thanks to automated valuation models.

To begin your pricing research, get a quick online home value estimate from a tool like HomeLight’s Home Value Estimator. While it shouldn’t entirely dictate your pricing, an online home value estimate can give you a reasonable price range to begin your work.

Enter your address and answer a few basic questions about your home, and we’ll provide a preliminary home valuation in less than two minutes.

Online valuation tools are only a starting point for pricing your home to sell, though. They won’t give you all the information you need in pricing your home, and they use limited data.

For example, an online tool might compare your property with a home on your street that sold for $50,000 less than it could have.

“Maybe it needed new flooring, there was damage done, it had pets, and it needed a new rug,” says Susan Boyer, a top-selling Utah real estate agent with 14 years of experience. “There are different reasons why an online evaluator is not going to know that, so it might under-price your house.”

While these tools give you a good foundation, your next step should be to connect with a trusted real estate agent who knows every inch of your market. An agent will factor in details that aren’t always measured by these automated tools that may substantially decrease value (or add to it!), such as recent upgrades, water views, a proximity to a high-voltage power line, noise levels, positioning on a steep hill, or general buyer sentiment in the area.

Review the comps provided by your agent

To determine home value, your real estate agent will conduct a comparative market analysis (CMA) that analyzes local comparable sales or “comps.”

Comps are homes similar in size, amenities, structure, and age to your own that recently sold in your area. Real estate professionals and home appraisers use comps as a reference point for the subject home and then make dollar adjustments based on competitive differences. The analysis considers notable features that drive or reduce value.

However, experienced agents also take local market conditions into account. “Prices have come down across pretty much every neighborhood; it’s just depending on which neighborhood has demand,” Arendsen says. While high-demand homes in San Diego’s coastal communities are holding on to their prices, inland areas have seen 11% to 15% price reductions, he says.

“People will look at comps that sold six months ago, and you can’t use those anymore,” he says. To hit the market with a strong asking price, “we’re only looking at properties that have closed within the last two to three months or went into escrow in the last three to four months.” The goal is to eliminate any comps that sold before interest rates started going up or when market conditions were significantly different. “So we want to stay away from those prices and look at what’s happening today,” Arendsen explains.

Why do comps work to price your home?

Overall, comps work because they give you real-world data on how similar homes near you fared in the current market. Analyzing a group of six to 12 comps provides clarity about how your home measures up to the competition in other relevant market trends, such as inventory levels, price per square foot, and average days on market.

With home sale records readily available in many markets online, you may be eager to find comps yourself and make a comparison on your own. But a real estate agent does it more efficiently and with greater detail. They have access to tools like the MLS database that provide more recent sales and details about comparable properties. Not to mention it’s one less task off your plate.

If you aren’t sure where to begin your search for a real estate agent, online agent-matching platforms such as HomeLight make it quick and easy to find great candidates. Tell us a few details about your home and selling timeline, and our platform will analyze over 27 million transactions and thousands of reviews to provide recommendations for up to three top real estate agents with extensive knowledge of your local market.

So now you know what goes into pricing your home to sell — but it’s not a foolproof process. Here are some common mistakes to avoid when setting your list price.

You overvalue certain renovations

It may come as a surprise, but not all home renovations have a positive ROI. In fact, Remodeling Magazine reported that the average payback for 22 common professional remodeling projects in 150 major U.S. markets was only about 62% in 2022. That means your renovations likely won’t translate into a dollar-for-dollar increase in home value. So, if your bathroom remodel cost about $27,000, you may see a resale value of just about $16,000.

You put emotions over logic

No matter your reasons for selling, emotions always go into a sale. Your home is a special place, and letting go of it can often be difficult. If there’s sentimental value attached to your property, such as memories of your parents or grandparents, pricing can be especially challenging.

It’s important to let logic supersede emotion when setting your price. Think about it from the buyer’s perspective: Just because the home means a lot to you doesn’t add monetary value to the property. And the right price is your best shot at commanding the value your home deserves.

You neglect to consider eyesores and ‘earsores’

If you’ve lived in your home for some time, you’ve most likely learned to ignore the items that used to bother you. But when setting your price, take some time to look at your home through a clear, objective lens. Are there any noises, blights, or unsightly views that a new homeowner might notice? Maybe there’s a lot of traffic on your street or railroad tracks nearby. Perhaps some power lines block your bedroom view. These negative features could require you to lower your price.

“It’s unfortunate because in the [past seller’s market] we were in… those homes were still selling,”  Arendsen says. He remembers selling one home that was “literally on an exit ramp” for Interstate 5 in Oceanside for about $20,000 over asking price amid multiple offers.

“In today’s market, those types of homeowners may want to consider holding onto those homes because unless you price that property so significantly under market value, you’re most likely not going to be able to sell it,” he adds. “There are better options out there; there’s some competition and too much hesitation from buyers knowing that the values are coming down and there’s more inventory coming in the future.”

Knowing how to successfully sell a home with eyesores or earsores is another reason it’s wise to partner with a proven real estate agent in a challenging market, or when selling a challenging home. A top agent can show you all the best options to consider.

Give your home credit where due

With all of that said, don’t be too hard on your home. You put a lot of effort into making it a comfortable and pleasant place for your family, so while it’s important to be realistic, give your home praise where it’s warranted.

It’s helpful to have your agent take a quick tour of your home. “We’re someone who knows the area and has feet on the ground,” Boyer says. An experienced agent can see firsthand what specific features might play to your advantage and increase your home’s value.

For example, the size of your yard and its amenities can entice more buyers nowadays. In our survey, 26% of buyers said having their own yard or outdoor space influenced their decision to buy a home last year, a perk that goes hand in hand with Americans spending more time at home, thanks largely to the number of remote workers nationwide tripling since 2019.

Some other considerations that may give your home more credit:

• Recent renovations that increase your home’s value
• Nearby restaurants or shopping centers
• A finished basement
• Larger lot size

“The homes that are in good neighborhoods that are nicely remodeled with today’s standard renovations — maybe a more bohemian style or a modern look versus the nineties and the early 2000s — those homes are selling, and they always will,” Arendsen says.

While 22% of buyers told HomeLight that they wanted a new home so they could decorate and renovate it as they wished, any must-do repairs you’ve let slide can warn buyers away. “A lot of people are still scared to do renovations because they’ve heard horror stories of contractors being backed up, construction prices going through the roof, and materials shortages out there. So that makes it even more important to provide a product that is move-in ready,” Arendsen adds. “We are seeing labor costs come down, and some materials costs coming down, but there’s still a lot of hesitation from your average buyer.”

Don’t forget to show your home at its best. In HomeLight’s Top Agent Insights report for Fall 2022, 86% of agents surveyed said that the pandemic homebuying boom caused sellers to be overconfident and slack on listing preparations. Granted, 31% of sellers told us all the steps required to prepare a house for sale flummoxed them, but only 32% said they deep cleaned the home before listing. What’s more, only about 20% worked on curb appeal and landscaping while 30% decluttered, 25% staged the home, and 25% handled deferred maintenance.

Agents say it time and again: Those seemingly small steps add up to a great impression — and more money on the closing table.

Factor in your selling motivations

Every seller has their own reasons for parting with their home, and the circumstances around every sale are different. Maybe you’re trying to buy a home at the same time, or perhaps you need to hurry your sale in order to move. All of that will factor into your pricing.

If you need to move quickly, it might be beneficial to lower your starting price, so you’re able to attract more aggressive offers, advises Gladys Blum, a top real estate agent in Salem, Oregon, with 46 years of experience. Your agent will go over your timeline and selling motivations in your first meeting.

“I’m going to say, ‘Hey, if you want to sell, what’s more important: time or money?” says Blum, who works with over 67% more single-family homes in Salem than the average agent. “If you want to sell it in 60 days, we need to be below your competition.”

Look for a price range ‘sweet spot’

However, be careful that you’re creating competition instead of fighting it, says Boyer, the Utah real estate agent. That means finding a middle ground — a range that’s not too high, not too low, and not too crowded — instead of trying to emulate your neighbor’s success, especially as the market changes.

The median existing-home sales price in March was $375,700, a decrease of 0.9% over the previous year, NAR records show. Let’s say your agent believes your home is worth between $320,000 to $350,000. At the moment, several homes in your neighborhood are priced at $325,000, and several more are priced around $345,000 to $350,000.

Your ideal price might be right in the middle, about $330,000 to $335,000, which is free of other sellers. Even though that may be less than you’re hoping to get, you’re opening yourself up to attractive offers while also showing buyers you’re fair.

“You drive a lot of offers, which creates competition and actually helps you get the high-end price,” Boyer says. “I’ve seen clients come in too high that would’ve gotten that desired number if they had come in at the middle and let the market take over.”