With homes going over asking price on a regular basis many sellers who are entering the market think that their home is going to fetch them more money than anything that has sold…. because their home is always the best one, right? I have seen many sellers lose out on thousands of dollars from incorrectly pricing their home.
Naturally there is nothing wrong with wanting to make as much money off your home as you can, but the reality of the market always has to be taken into account. Under pricing a home and holding off offers can back fire and it is important to get it right from the start. The goal when listing your home is to hit the “sweet spot” the beautiful place where all parties involved see the value and come to an agreement.
My most recent sale was a perfect example of this tactic. After reviewing the comparable sales and current offerings my sellers agreed to a list price which was reflective of the market. They did not under price the home, but they realized and knew that by being logical in the value they were conveying, that buyers and realtors alike would know our product stood out against the competition.
The result? Our listing sold in 10 hours for $5000.00 over asking price in record time, for a record price on the street and for $20,000 more than the same home sales in the area. By every account my sellers hit a home run and the list price had a lot to do with this.
You see, if we listed the home for even $5000.00 more, the response would not have been as strong. The highest sale price for an identical property in the area that was fully renovated was only $20,000 more than our list price. Our home was a great offering, but also required some TLC which had to be accounted for in the asking price. Had we broken the threshold of reason, buyers and agents alike would be reluctant to see the value in our property.
Instead, by hitting the “sweet spot” we attracted the interest of an agent and a client who felt strong enough to purchase the home over asking price because they saw the value and did not want to risk a multiple offer situation the following day.
I have seen the other side of the coin have devastating effects on sellers. By overpricing the home they do not generate enough interest and without attracting an offer in the first three weeks they are left vulnerable to low offers. In more cases than not, they will have to do a price reduction and likely sell the home for less than they could have had they listed it at the right price to begin with!
Before you list your home for sale it is important that you and your realtor do a good analysis of your area, your market and most importantly what you want out of the sale of your home. Remember, it is very hard to pull the wool over someone’s eyes and by not listening to the market, you may just end up pulling it over your own.