Not sure how to price your home?
Well, we can probably agree that pulling the most equity you can out of your home is the main goal.
Let's take a look at the pros and cons of listing under/over market value.
What is Market Value?
A real estate Appraiser can help you determine true market value by gathering data from recently sold properties within a half mile radius of your home. Realtors will often take a similar approach to generating their own Broker Price Opinion (BPO) and help come up with a marketing strategy for listing your home for sale.
(If you are in need of one, please don't hesitate to reach out to your licensed brokers with Dragonfly Homes at Coldwell Banker Realty.)
What if I price my property too high?
Beware of the sales pitch often used by desperate Realtors who agree to list your home too high. They may be inexperienced or looking to get their sign in your yard to attract other buyers/sellers. You may be tempted to list higher because you can reduce later, but there are several key reasons why this may not be in your best interest.
Attracts Less Buyers
Buyers will often search using a price range and will inadvertently rule your property out if you are above their max purchase price they are willing to pay.
Longer Time on Market
A home that is priced high sits longer on the market and can become stale. There are strategies we put in place as Realtors to refresh a listing that's become stale, but by having to implement those strategies you are less likely to get what you're asking for on the property.
Price Drops Lead to Lowball Offers
When a home has sat on the market for 30+ days you've officially entered into the territory where buyers are wondering why it's still available. It may spur them to make a lowball offer or look for flaws to justify their lowball offer.
What if I price my property too low?
Alternatively, if you price your property too low, it can have a staggeringly opposite effect from the one you expected to illicit. It's important to realize what effect the sales price we agree on will have on prospective buyers and on you as the seller.
Less Buying Power
Sellers aren't always looking to leave money on the table and when they inadvertently do by pricing the property too low, they aren't able to commit to a higher down payment on their next home or tuck that money away for savings or retirement.
Competition May Turn Some Off
Buyers are super savvy these days. They are pouring over listing details for dozens of properties, comparing yours to the cute two-story with wrap around porch down the street from you. They are also calculating price per square foot and scrutinizing photos to see if those stainless steel appliances really are as new as you've advertised. If there are 36 offers on the property, it may deter a buyer from throwing their hat in the ring knowing their chances of getting their offer accepted is slim.
What is the sweet spot?
Many realtors encourage you not to list for under market value, but I'm here to deviate from popular opinion. Listing for slightly under market value may garner just enough attention and desire to spur buyers to make a competitive bid, which will often drive up sales price. We offer more strategies to help our sellers pocket more money from the sale of their home, but by taking this small step towards trusting your Dragonfly Homes representative, you are making a smart financial decision to increase your chances of selling for top dollar.
Higher Risk = Higher Reward
It may feel risky to list for less than what you'd like to receive for the property but this risk can pay off big time by ensuring you get your home under contract with a flurry of activity that will help you sell your home for more. This is especially beneficial if you are already under contract on a home to purchase or need to ensure a quicker sale with plenty of options from a myriad of buyers.
Our team is trained to help organize multiple offers into a spreadsheet that will help you analyze the offers side by side and choose the one you feel most comfortable with.
Pricing your home right this winter is important, especially because there are less buyers looking for a home between November-February than at any other time of the year.
Putting a smart strategy together to appeal to a wide range of buyers will ensure a quick sale and allow you to move on to your next home sweet home!