Price is the one thing you control that decides almost everything else. Get it right and the first two weeks bring the buyers. Get it wrong and you spend a month proving it. Here's how to price a listing the way I teach it: start with a range, pick a spot in that range on purpose, watch the first two weeks closely, and have a plan for the cut before you ever need it.
The short answer
There's rarely one perfect price. Build a range from recent sales that truly compete with the home, then look at what buyers can buy right now (actives and pendings). Pick a launch price that wins against that competition and fits the search bands buyers use. The first 10 to 14 days get the most attention. If showings are low, it's usually price or presentation. If showings are good but no offers come, look at condition, payment and objections. When you cut, cut once and cut enough to change the homes it competes with. Sometimes a concession solves the problem better than a cut.
Step by step
- Pick real comps. Same type, size, condition, layout, lot and location as much as you can. Nearby isn't always comparable. Explain why each comp counts. See how to explain a CMA.
- Add the competition. Sold homes show proven value. Pending homes show what buyers just picked. Active homes show the choices your buyer sees this weekend. All three belong in the price.
- Ask the key question. At this price, what else can the same buyer buy? If it's a bigger lot, a finished basement or a newer kitchen, you're priced into a losing fight.
- Mind the price bands. Buyers search in brackets. A price just over a round number can drop out of a lot of searches. Price so the home shows up in the right band.
- Keep "what I need" separate. What the seller paid, spent or wants to net doesn't set value. Run the net sheet separately.
- Don't count improvements dollar for dollar. A project helps only if it changes how the home stacks up against the others.
- Leave appraisal room in the talk. If the buyer finances, an appraisal follows. Price where the evidence can back it.
- Decide the plan before launch. Price, concessions, repairs or patience. Set a review date at 10 to 14 days and put it on the calendar with the seller.
The price-cut playbook
- Days 1 to 14: the launch. Every saved search sees it. Priced right, this is when it goes under contract.
- Days 14 to 21: read the signals. Few showings usually means price or photos. Lots of showings and no offers usually means condition, the payment or something buyers find at the showing.
- Days 21 to 30: make one decisive move. Re-pull the comps. What sold, what went pending, what's new? Then pick the new price for the position you want, usually the next search band down. Small trims rarely move buyers.
- After that: the listing gets stale. Each week it sits makes the next fix cost more.
When it's time for that talk, see how to ask for a price reduction.
Cut or concession?
- Price cut: when the price sits above the comps, showings are weak or buyers keep choosing other homes.
- Seller concession: when the price is supported but buyers struggle with cash to close or the monthly payment. It can go toward closing costs or a rate buydown, if the loan program and lender allow it. See seller concessions and rate buydown vs price cut.
- Repair credit: when one known issue keeps scaring off qualified buyers.
A worked example (illustration only)
A home listed at $615,000. Two weeks, few showings. Buyers search in $25,000 bands.
| Move | New price | Effect |
|---|---|---|
| Small trim | $605,000 | Still in the same search band. Few new buyers see it. |
| Band move | $599,000 | Shows up in searches that top out at $600,000. New pool of buyers. |
| Concession instead | $615,000 plus a credit toward buyer costs | Helps cash-short buyers, keeps the price for comps. |
Illustration only. These numbers are made up to show the math. Any credit used for a rate buydown or closing costs must fit the buyer's loan program, and a lender sets the real terms. The annual percentage rate (APR) would differ from any note rate. This is not an offer of credit. Program rules change. Check limits with the buyer's lender and in HUD Handbook 4000.1 for FHA loans.
How to explain it to your client
"I'm not going to give you one magic number. I'm going to show you the range the sales support and the homes buyers will compare yours to this weekend. We'll pick a launch price on purpose, inside the right search band. Then we watch the first two weeks. If buyers tell us something, with few showings or the same complaint over and over, we make one clear move instead of a bunch of small ones. We'll set that check-in date today."
Watch-outs
- "We can always come down later" costs money. The best buyers see it first and move on.
- Don't price from a neighbor's sale alone. Find out what was different and when it sold.
- Price per square foot is blunt. Use it as context, not the answer.
- Online estimates and tax values aren't list prices. They miss condition, layout and competition.
- Don't cut on a calendar alone. Cut when buyer behavior keeps disagreeing with the price.
- Fix presentation problems first. Bad photos or a hard-to-show home can look like a price problem.
- Attached and detached homes behave differently. Price each from its own competition.
Further reading
- Pricing Your Colorado Home to Sell on kennarealestate.com
- The Colorado Price-Cut Playbook on kennarealestate.com
This is training for real estate agents. It isn't legal, tax or lending advice. A licensed loan officer sets loan terms. Check with your managing broker.
Questions
Should we start high to leave room to negotiate?
Only within a range the evidence supports. Price too high and buyers see better homes for the money and skip it.
Should we price low to get multiple offers?
Sometimes. It doesn't guarantee a bidding war. It depends on the home, the competition and what the seller will accept.
When should we cut?
When buyer response keeps disagreeing with the price. Check at 10 to 14 days. Make one decisive move by about day 30.
How big should the cut be?
Big enough to move into a new search band or a new set of competing homes. Small trims rarely change anything.
Is a concession better than a cut?
When the price is supported but buyers are short on cash or payment, a concession can work better. When the price is above the comps, cut.
Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.