At any time of year, an effective pricing strategy can be the difference between a home that sells quickly at a desired price and one that languishes on the market for months. There’s no time when this is more apparent than at the end of the year, as holidays and family gatherings overtake the urgency of finding and moving into a new home.
Although your sellers have already made a great decision by choosing to hire a real estate agent (which can add about $34,000 more to their final sale price), what year-end pricing strategies can you use to position your listings for maximum appeal? Here are 11 ways to boost your chances of a happy new year with home sales that don’t slump at the calendar’s turn.
The first and best way to maximize the appeal of your home listings is to stick with a tool you already know: the comparative market analysis (CMA). It’s pretty standard advice, but it can be easy to overlook as you rush to clear inventory at the end of the year. This quick-and-dirty look at what nearby homes are listed for (and selling at) can give you a starting point for discussions.
2. Use pricing psychology
Retail pricing psychology states that consumers love prices ending in a nine or a five; this is not necessarily true in real estate. Round numbers sometimes move buyers more than a price that resembles a (metaphorical) fire sale.
On the other hand, some buyers like the look of the smaller number; this is why the “just below” strategy is effective (as in, a property is “just below” $300,000 when the price is $299,999). The best way to determine the psychological pricing strategy that works in your area is to look at both the offering and closing prices of homes that have sold recently.
3. Price for search
Tailor your pricing to search values. Many buyers pick a round number and set this as a hard ceiling for any automated alerts or manual searching. Keeping your client’s property below common levels can ensure they get maximum visibility. For example, it can be much more fruitful to list a property at $495,000 rather than $501,000, as it allows more would-be buyers to see it, even if the overall financial difference is relatively small.
4. Create urgency
If you mark down a listing, call it a year-end discount (and insinuate it’s not available at the low prices in the new year). This price cut might attract budget-conscious buyers or investors looking for a deal and can be framed as a limited-time offer.
In addition, the end of the year may find some buyers motivated to invest proceeds from a previous home sale to avoid a big tax hit; investors might also be looking for something that minimizes their tax burden. Use this “limited time only” strategy to court those who have personal reasons for buying a property quickly.
5. Offer incentives for fast closings
Consider rewarding well-qualified buyers who can get to the closing table quickly. You might offer credit towards closing costs or cover specific fees. These opportunities work for people with an urgent need for housing and those looking to capitalize on tax benefits before the end of the year.
6. Refresh online listings and staging
If property photos don’t reflect the season or the current state of the property, give your online listing a quick update. Take new photos that include pictures in the appropriate season, and update your descriptions with any incentives, rewards, or discounts. This can also include tweaks to any staging that’s been done to better reflect a homey vibe appropriate for the time of year.
Posting one quick listing on your social media and moving on is easy, but year-end pricing strategies require more attention for maximum appeal. Run targeted ads to potential buyers that emphasize the potential benefits of purchasing before the end of the year.
8. Work with a relocation specialist
Many families looking to buy a new home stop their search when the school year begins; it’s a lot of work to uproot kids from school and settle into a new routine when there are just a few weeks of winter break in the middle of the school year.
The solution? Partner with a relocation specialist. These professionals help families (and even singles) ease the transition to a new home by scouting out moving companies, schools, and shopping centers to help make things move smoothly. They can be a valuable source of leads or information on what would-be buyers are currently looking for.
Large companies may sometimes make significant shifts among employees before the end of the year. For some, this is the middle of the fiscal year, a chance to course-correct and move employees to different locations. For others, this end-of-year employee shift can help offset other expenses and provide tax benefits in the following year.
Whatever the reason, human resource departments can be an excellent place to find buyers; the company might also be ready to invest in company housing for people moving into the area.
10. Buy down the rate
A temporary rate buydown can incentivize buyers who are unsure, especially if they are hesitant to commit due to high interest rates (or looking in a market that doesn’t favor buyers). Depending on the lender and the seller, this temporary rate can last a few months or years.
11. Don’t panic
Don’t freak out as the days pass and the end of the year approaches. Trying to convince your sellers to take less can be tempting, but keeping their needs and goals in mind is essential. Some real estate agents practice underpricing to sell homes quickly, but this can leave a lot of money on the table for you and your buyers. Think the opposite strategy — overpricing to highlight potential discounts — will get you to closing faster? That’s not necessarily true at the end of the year, either.
Take time to investigate the current market and hone in on your potential buyer. Price the property according to the CMA, and make sure the pictures and descriptions are current. These year-end pricing strategies will position your listings as a solid piece of real estate that meets the buyer’s needs and ensures a happy new year all around.
Luke Babich is the CEO at Clever Real Estate.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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