Did you know pricing your home just 5% too high can cut your potential buyer pool in half? As experts in the Santa Cruz real estate market, we understand the critical importance of pricing your home correctly. A well-executed Comparative Market Analysis (CMA) is the cornerstone of our approach to helping you achieve the best possible outcome when selling your property in Santa Cruz.
The Value of a Good CMA and Knowledgeable Santa Cruz Realtor
A CMA is an in-depth evaluation of similar home sales in your neighborhood. We analyze real home values in Santa Cruz and current market conditions to create a comprehensive pricing summary. Think of Zillow’s “home Zestimate” algorithm, but with the added expertise of a human touch and local knowledge. Our valuation process considers several online algorithmic estimates and adds in several additional key factors that these websites often leave out. Some of the things we look at when picking strong comparable properties includes:
Similar home sizes and lot sizes
Floorplan layout
Potential negatives (ex: proximity to a busy street)
Unique features of the property (ex: views)
Condition of the home and year built
Days on the market before selling
Listing price vs. final sale price
Don’t worry if the CMA’s suggested list price is a little low. In a sellers market, typically homes that are priced slightly below market value often receive numerous offers, which drives up the sales price. This strategy works best for turn-key homes in desirable locations. Keep in mind pricing too low may imply that there may be something wrong with the house, so there is definitely an art to this. If your home is a tough sell regardless of price (ex: on a busy street, steep driveway, or has deferred maintenance), then we have to be careful in pricing your house low as it could back-fire because multiple offers just aren’t likely at any price. For those with deferred maintenance, this may be a fixable solution. Did you know many Realtors offer a concierge home prep program to help prepare your home for market so you can get top dollar without any up front costs? More info on our Santa Cruz presale renovation program here. It is important to work with a local Realtor that can provide an accurate CMA and will help you pick the marketing and pricing strategy that will work best for your specific property.
The Danger of Overpricing!
This cannot be overstated and we have seen it fail time and time again. Arguably the most common mistake sellers make is insisting on pricing their home too high. Simply put, this is not a good strategy. While it's tempting to list your home at a higher price in hopes of a big payday, this strategy almost always backfires. Here's why:
Reduced visibility: Overpriced homes often fall outside buyers' search parameters, meaning fewer potential buyers will even see your listing. This goes back to basic economics of supply and demand - the fewer people that see your home for sale, the less people there are to potentially even buy it. Keep in mind people set up home search notifications using specific parameters. For example, many people may set a search criteria for all homes under $1m, which means that if you list at $1.05m or even $1.1m there are that many fewer people that will see your home for sale.
Helping the competition: A high-priced home makes nearby properties look like better values, inadvertently helping sell other homes in the neighborhood first and thereby dragging out your days on market.
Market staleness: The first few weeks of a listing are critical because that is when your home generates the most buzz and interest. Overpricing effectively deflates that buzz immediately and the listing stagnates and people start to think the home has something wrong with it. Homes that sit on the market for more than 30 days raise red flags for buyers, who begin to wonder what's wrong with the property. This creates an inverse effect from the desired outcome, where buyers now start to make low-ball offers by assuming the seller might be getting desperate.
Lower appraisals: Even if you find a willing buyer, if the home doesn't appraise at the high price, the transaction may fall through anyway.
Loss of credibility: Savvy buyers who've done their research may not even consider overpriced properties and consider the sellers to be unreasonable and not worth trying to work with.
Missed opportunities: Overpricing can prevent the possibility of a bidding war, which often occurs with homes priced at or slightly below market value. Bidding wars are the true secret to getting top dollar!
The "Buying the Listing" Trap
Beware of agents who quote unrealistically high listing prices. This deceptive practice, known in the industry as "Buying the Listing," can lead to frustration, wasted time, and ultimately, a lower sale price. Don’t make the mistake of hiring the agent that tells you what you want to hear instead of what you need to hear.
Choosing the Right Agent:
While many people have a friend or family member with a real estate license, not all agents are created equal! Did you know that according to data from the Consumer Federation of America, ~47% of realtors did not complete a single deal in 2024? It's crucial to work with a local expert with a track record of success. You need an agent who will:
Provide honest, market-based pricing advice
Have in-depth knowledge of the local real estate landscape
Know how to maximize your home's value
For more information on how to choose a Realtor in Santa Cruz, click here.
My team prides ourselves on our integrity, competency, and commitment to exceptional customer service. We'll always give you the truth about your home's value, even if it's not what you want to hear.
The Power of Realistic Pricing - A well-priced home can:
Attract more potential buyers, including back-up offers in case a buyer falls through
Sell faster, avoiding the stigma of a stale listing and low-ball offers
Often result in multiple offers, potentially driving the price up even above market value based on high perceived demand
Smooth the appraisal process, reducing the risk of the deal falling through
While it may seem counterintuitive, pricing your home competitively from the start is the best strategy for maximizing your sale price. A thorough Comparative Market Analysis, conducted by an experienced local agent, is the key to finding that sweet spot that will attract buyers and potentially spark a bidding war. My team is committed to helping you navigate the complexities of the Santa Cruz real estate market. You can trust in our expertise to price your home right and achieve the best possible outcome for your sale. For more tips on how to sell your home in Santa Cruz for top dollar, click here.
Top Santa Cruz real estate agent Ace Woods brings a fun and educational approach to real estate in the Santa Cruz area, with the goal of helping families build wealth through real estate.
Selling a home in Santa Cruz? I will help you prep your home for sale with no up front costs so that you can get top dollar when you sell your biggest asset.
Buying a home in Santa Cruz? I will help you become the strongest buyer possible, with an arsenal of financing options, off-market homes, as well as a competitive spirit to help write that winning offer.
Call or email Ace for a free consultation to discuss your real estate goals at 831-419-5852 or ace@dreamcatchproperties.com.
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