How should I price my home?

“Pricing a property is more about its appeal than its actual value, especially in a unique market like the Bay Area.” Shawn Kunkler Compass

It’s perhaps the most important question a seller can ask, and among the most crucial of decisions a Realtor makes:

The listing price. One can list a property above, at or below the market trend. Each method comes with its own benefits and drawbacks.

Start too high and you risk scaring away potential buyers. Pricing too low can lead to a smaller profit.

So how do sellers and agents find that “Goldilocks zone”?

We took it to Bay Area Realtors.

Kevin Ho of Vanguard Properties suggests listing a home slightly below market value, which often attracts multiple offers and may launch a bidding war.

“Sellers may not understand or realize that most listings are purposely priced low, as that’s what the convention has been for many years now,” Ho said. “Even with COVID19, nearly 62% of singlefamily home listings in San Francisco sold over list price, which was down from a high of nearly 86% in 2018. Buyer agents have been trained to expect as much and will look at a list price to see what the implied market price will be.”

As always is the case with real estate, location matters, said Karin Cunningham of Berkshire Hathaway HomeServices.

“Make sure you review the most comparable recent sales within a halfmile radius, if you can,” Cunningham said. “See what the homes have been listed at versus what they have sold for to get a good idea where you should start.” Shawn Kunkler of Compass, author of “Insider’s Guide to Home Buying, San Francisco Edition,” said it’s vital to build buzz around a property in order to properly price it.

“Pricing a property is more about its appeal than its actual value, especially in a unique market like the Bay Area,” Kunkler said. “In order to drive up a property’s price, the seller must get the most amount of people excited in the shortest amount of time.”

Sellers want a price that’s attractive enough to entice multiple offers, said Matt Heafey of the Grubb Co.

“I like to call this ‘retail pricing’ because it is closer to the actual outcome and yet attractive enough so the home will still receive a couple of offers — pushing the price to a true ‘market price,’” Heafey said. “If you are in an area that doesn’t have as much demand, I like to do a more transparent price or a price the seller would take. That way if someone likes the house enough to write an offer at the price, the seller won’t be disappointed.”

Finding an agent who’s an expert in the seller’s neighborhood is another must. “Working with an active real estate professional who is fluent in the market in your area over an extended time is the first critical step to develop a pricing strategy,” said Adelaida Mejia of Vanguard Properties. “Your house is not just a house; it’s a lifestyle. And this is in good part what you are selling.”

It also helps to have an agent who anticipates what else might come on the market.

“Data from recently sold properties are a good bellwether, but your agent should also be highlighting coming soon and active properties so you know your competition,” said Anne Herrera of Sotheby’s International Realty.

The specifics of your listing also determine its price. For example, is it a house or a condo? Condo prices are falling, while singlefamily homes in the city are seeing an increase, said Astrid Lacitis of Vanguard Properties.

“Many condos — particularly in densely built locations — are actually dropping in price, whereas houses near soontobe reopened retail streets with good public transportation are selling with multiple offers,” she said.

The audience you’re selling to also determines price, Lacitis said.

“A fixer with a $100,000 pest report, in need of a new roof and a kitchen and bathroom remodel, will appeal primarily to contractors, and contractors always pay less,” she said.

Finding the right list price only comes after a comprehensive analysis of the property, its condition, its surroundings, its features and its target market.

In other words, “Pricing correctly is an art, one that is highly honed by effective Realtors,” Lacitis said.