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Should You Price a House High or Low? The Answer Might Surprise You!

March 3, 2015

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When you put your house on the market, one of the most important decisions that you and your realtor will make is the price tag. Conventional wisdom is that if the market is hot, you should price your home lower than its value in order to inspire a bidding war, which could drive the price higher.

Not so fast! According to research published in the Journal of Economic Behavior & Organization, homes that were priced slightly above their value actually sold for more money than their lower-priced counterparts. Although this study has some issues (the research was done at the height of the housing crisis, for example), it’s an interesting take on home prices. The best advice out there, though, is to make sure that you are comparing your home to current sales in your area. The market has really changed in the past year or so, so using the most recent comparables is the best way to ensure that you are pricing your home to sell.

Your realtor has access to all the sales in your area, and can usually give you a reliable recommendation for what price to ask for your home. Good luck out there!

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