Pezzini Luxury Homes

10 Tips on Pricing Your Luxury Home

If you think that a luxury home in Los Angeles will always bring you enormous profits, you’re wrong. Pricing a luxury home requires just as much strategizing as an ordinary home. Whether you work with a real estate agent or on your own, you need to be vigilant when setting up a selling price for your luxury home. This article outlines ten brilliant tips on how to price your luxury home in Los Angeles for sale!

Tip # 1: Understand the Luxury Home Market

This is the most useful tip simply because it helps you kick start the process of setting a selling price. Even for amateur sellers, online resources are a great means of understanding the luxury real estate market. Look at active listings and see what the buyers tend to like or dislike about these listings. This way, you’ll not only get expertise in your market but also learn how to stand out from other competing luxury property sellers.

Tip # 2: Look at Competing Listings

This tip is different from the first one because it urges you to narrow down your understanding of the market to know your competition. This means viewing luxury homes that have the same size, amenities, construction, and price range (if you have decided on one already). You can do this by considering:
  • Withdrawn listings to see how long it took for sellers to withdraw their property from the market
  • Expired listings to learn why a luxury property didn’t get sold and hence expired
  • Active listings to study what factors contribute to keeping a property on the market
Make sure that you are well acquainted with your competition by looking at luxury homes for sale in your area before determining the selling price of your home.

Tip # 3: Take Charge of Your Emotions

Many first-time sellers tend to allow their emotions to take over them when making decisions about a home they have been emotionally invested in. It is understandable to find it difficult to put a value on something that holds priceless memories. However, an emotional interpretation of the value of your luxury home will prevent you from setting up a realistic value or price for the buyer. Therefore, be rational and objective instead of emotional when making business decisions.

Tip # 4: Make Amends

For those looking to set an ambitious selling price, it is necessary to ensure measures that make their luxury homes look like they are the best for their value. To do this, you must:
  • Get maintenance done, i.e., repairs, replacements, cleaning, etc.
  • Update appliances and upgrade any amenities
  • Offer a few small perks to the buyer, such as a complimentary wine cellar, bookshelf, automatic thermostat, etc.

Tip # 5: Question Your Real Estate Agent

If you are planning to hire a real estate agent in Los Angeles, remember that the good agents are there to assist and help you instead of intimidating or overpowering you. Hence, you should make it clear that your agent understands your needs and concerns. Some agents often price homes lower in an attempt to sell them fast, earn their commission, and then move on to another sale. So, when you feel that your agent is pushing the price of the property too low without any proper justification, don’t forget to question it.

Tip # 6: Seek Advice

Seeking adequate advice is always a good idea when deciding a price for your luxury home. Two ways of getting good advice are:
  • Hiring an appraiser – An appraiser is a qualified professional whose job is to identify the market value of a property. Consult one who has a reputation and experience in the real estate market of your neighborhood.
  • Asking friends and family – Once your home is ready to be listed, give your family and friends a tour and seek their advice for pricing
  • Organizing an open house for agents – Your agent can help you invite other agents who can collectively reflect on your property and give their insights about what its price should be

Tip # 7: Avoid & Embrace Zeros Smartly

Luxury homes for sale with prices that end with a 9 attract better deals than those that end with a zero. This has to do with the psychology of buyers – zeros tend to trigger buyers to negotiate while the nines seem to be firm and deliberate. So, a home priced at $459,000 will be perceived as more fixed and unchangeable than a home priced at $500,000. In some instances, however, using zeros can actually be a good option, such as when pricing a property for internet searches. The online searchers are more likely to look up a property in approximates using zeros (i.e., $500,00) as compared to a fixed price (i.e., $499,000).    
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