When our clients sell their home, one of the most common goals they have is to maximize their investment and sell for top dollar. Naturally, homeowners want to arrive at a home price that reflects the value of their home and encourages the highest offer possible. Do you know how you would price your home?
Check your real estate pricing expertise with a quick game of Two Lies and a Truth:
1. If you price your home under market value, you will sell your home for less and lose money.
2. If you price your home above market value, you will have “wiggle room” to negotiate with prospective buyers.
3. The market sets the value of your home and will decide the sales price.
Statement One: If you price your home under market value, you will sell your home for less and lose money.
Lie: Pricing your home under market value does not mean that you will sell your home for less. In fact, in a competitive market, pricing just below value will generate a lot of interest and often yield multiple offers. A skilled real estate agent will thrive in a multiple offer situation and leverage the interest to negotiate the best terms and price possible.
Statement Two: When you price your home above market value, you will have “wiggle room” to negotiate with prospective buyers.
Lie: Overpricing your home does not leave “wiggle room” for negotiation. This pricing tactic is more likely to have negative consequences than positive ones. An overpriced property can make the competition look more appealing and cause your home to sit on the market for longer than average. The longer a home is on the market, the less likely it is to generate multiple or full price offers.
Statement Three: The market sets the value of your home and will decide the sales price.
True: The market will dictate the sales price of your home. However, there are a lot of factors that will determine how the market receives your home. Most home buyers start their search on the internet. Excellent marketing is one of the most effective ways to ensure that your home receives maximum exposure. Thorough research and understanding the competition are also crucial components of receiving a desirable offer.
To provide some context we recently listed a home in the East Valley for a family that had a very tight timeline to relocate out of state. During our consultation, we learned that a quick, low hassle sale was the number one goal for our clients. Since NextView Home Professionals is an Opendoor Partner, they were referred to us when Opendoor was unable to provide them with the terms and conditions they needed.
After learning the importance of their time frame and touring the home, we went through comparable properties in the area and began to discuss list price. We strategically advised our clients to list the home just below the market value. We did not price the home drastically low, just about 1% below the closest comparable home. This would ensure that similar homes on the market did not receive an offer before we did. Remember the importance of knowing your competition. Our client agreed and we began our marketing process.
We put a rush on our marketing package and got the home on the market a few days later. Within a few hours we had multiple qualified buyers ready to view the home. The first day on the market, we received multiple offers. Some of the offers were sight unseen from the marketing alone. When we reached 8 offers and were confident that we were working with our winning buyer, the homeowners decided to stop allowing viewings. After our negotiations, our client chose an offer that was 6% higher than the original list price and $10,000 higher than the list price of our competition
Disclaimer: We do not recommend that every client price their home under market value. Every home price that we arrive at is based on thorough research and with a specific strategy in mind to achieve our client’s goals.
If you would like help developing a strategy to sell your home, Call Us Today at 480-281-3078.