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Four Tips For Pricing Luxury Homes

Luxury villa at night time.

If you want to ensure a successful sale of a property, select the right price from the very beginning. This is true whether you are a selling a $100,000 home or a $3 million luxury home.

The initial asking price sets the tone for the property: if it is too high, it could turn prospective buyers away; too low, and buyers may assume there is something wrong with the property. So how do you find that “just-right” price that will keep both buyers and your seller happy? Here are four tips to pricing a luxury home:

Perform an in-depth comparative market analysis

To find the ideal list price for a luxury home, a great real estate agent will spend hours researching what similar homes have sold for in the last three to six months and complete an in-depth comparative market analysis (CMA). An agent should also tour other comparable luxury homes currently on the market and call other brokers who have recently sold comparable properties to get a feel for demand in the market. A thorough CMA is the best first step to finding that just-right price for your area.

The highest price isn’t always the best price

In every market, there are real estate agents who promise sellers that they can sell their home for an unrealistic amount of money. It is your job to explain to prospective clients that agents who suggest the highest list price are doing them a huge disservice, as overpricing a home significantly slows buyers’ interest and means it is more likely to sit on the market without receiving offers.

Price competitively from the beginning

Homes that are overpriced from the beginning won’t receive as many showings and thereby fewer offers. After several weeks or months of this stagnant buyer behavior, a seller can miss out on prime marketing time and be forced to re-list during a more optimal time of the year. Additionally, homes that sit on the market for too long can develop a “stigma” where buyers assume there must be something wrong with the home.

Familiarize yourself with a home’s unique features

We said above that a great agent will take into account comparable luxury homes that have sold recently and those that are currently on the market. However, it is rare to find a luxury home that is identical to another, especially when these homes have been custom built. Familiarize yourself with every amenity a luxury home has to offer before determining the price.

The truth is that luxury homes do generally stay on the market longer than a lower priced home. The market for million-plus dollar homes is simply smaller and more niche than the market for less expensive homes. Don’t fear, though! Pricing properly from the beginning will ensure that a luxury home will not sit on the market for long. We hope these tips will help you with pricing your next luxury home!

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