Need to Sell Faster? Price Higher

If you're trying to sell your home in a hurry, your first instinct might be to cut the price in hopes of enticing more buyers. But this could be a misstep. It sounds counterintuitive, but especially in a competitive market, you may actually be able to sell your home faster by pricing it slightly higher than other homes in the area.

A study published in 2013 in the Journal of Economic Behavior & Organization found that homes listed for 10% to 20% more than comparable properties sold for slightly more. The study looked at 14,000 real estate transactions with an average sales price of $234,000. It found that homes sold between 0.05% to 0.07% higher, on average, for every 10% increase in asking price.

"Pricing a home 10 percent to 20 percent lower than comparable homes led to a ... decrease in the expected price," the study authors wrote.

Curious why? Here are a few reasons, along with tips for how you can make this strategy work for your listing.

The power of perceived value As marketers well know, consumers see the price of a good or service as more than just a number; they view it as a direct reflection of the value of the item.

When you walk into a department store and see a pair of sneakers for $79 and another for $19, you assume the $79 pair has to be "better" -- perhaps it has advanced technology, offers extra comfort features, or will last much longer. You have no idea how much the sneakers actually cost to make, so you rely on their retail price as an indication of their worth.

This perceived-value principle also applies to home sales. When buyers come across two similar listings -- same number of bedrooms, same location, same square footage -- with different prices, they suspect that either the more expensive home is overpriced (more on that in a minute) or it has some features that make it more valuable than its comp.

This can cause a higher-priced home to be snapped up faster, and for more money, for a number of reasons:

How to get more for your home A price increase can help get buyers in the door and looking for ways to interpret your home as more valuable -- but you still need to back those impressions with solid justifications for the price, or else they'll walk away thinking you've simply overpriced it.

What sort of things make buyers feel a price is "worth it"?

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Need to Sell Faster? Price Higher