Maximize Your Home's Value with This One Simple Tip

Price Bracketing 101

As a Seller in todays market, nothing is more frustrating than watching your home sit on the market for months without a ton of action. What if I told you there is one simple thing you can incorporate today that would help double the exposure of your home and help get it sold faster! Intrigued yet...get ready to learn all about something we Realtors call 'price bracketing.'

This is a listing technique that takes into account the way Buyers search for homes on the MLS. Buyers search for homes in these 'price brackets' in increments of 25, 000, 50, 000, and 100, 000. When a realtor sets up a Buyer client on Realm they choose their price bracket and receive notifications when a home in their selected range goes live on the MLS.

These brackets determine where you house will be positioned to attract these active Buyers, which is why its so important to use this strategy to your advantage. Lets say you estimate your home is worth approx. $900, 000. I know it may seem advantageous to list at $899, 000, but this number actually hurts your listing. What happens when you use this number, is that every Buyer that searches for homes in the $900, 000-$925, $950, $975 bracket, etc. is NOT seeing your property in their results. Your home only shows up in the lower brackets. Remember, in these higher price brackets your home is the "opportunity" house, or the "deal!"

You can also use Price Bracketing to your advantage once your realtor has completed an Active Buyer Analysis. This will determine the most popular brackets that are currently getting the highest amount of Buyer activity in the MLS, and guide you to select the bracket in your list price range with the most interest.

Here's how it works:

Lets say you are listing your home for sale and the CMA comes back with a recommended list price from $870, 000-$900, 000. Now, like any savvy Seller, you obviously want to get the highest offer possible on you property so you hit the market at $ 910, 000, thinking this will secure you the most money for your home, and expect to negotiate down with interested Buyers. This however, is a big mistake and can potentially hurt your listing in the long run. Here's why:

Graph showing active Buyer analysis

If

If If we take a closer look at this Buyer activity analysis, we see a graph representing buyer showing activity by $25, 000 price bracket. The number of showings in the $900, 000-$925, 000 bracket is around 500 for the past 3 months. One quick glance at the $875, 000-$900, 000 bracket and we can see the number of showings is almost 4,000!!! This is where our interested buyers are, and if we want to sell for the most money we need to attract these buyers to our property. In this case, the house would be extremely compelling at a list price of $875, 000. By pricing the home in this way, it becomes one of the 'best' homes in the $850, 000-$875, 000 category, while also easily going head-to-head with other homes in the $875, 000-$900, 000 category.

It's important to remember that the way homes sell for more money is by attracting large amounts of Buyers to the listing, and then having those qualified Buyers compete with each other for the home, thereby selling for asking price or more.

Just remember, you are pricing a home, not a used car, so get rid of those 99's, 24's, or 74's in your list prices and keep it clean and even. Find the most popular price bracket in your acceptable range, and make sure that list price is compelling enough to attract those qualified Buyers! Happy Selling!