When it comes to pricing, all too often home owners use what I call “the spaghetti strategy“ – throw a price at the market, and see if it “sticks.” Misunderstanding pricing is very common.
Top two pricing myths;
- Take what I paid for it, add what I put into it – and that’s what the price should be
- In order to negotiate, I have to price it considerably higher than my “bottom line”
What’s wrong here? Let’s look at #1;
Selling a car is something we can all relate to. You look at Kelly Blue Book or other market data for specific make, model, year and mileage to see what today’s market value is.
Home values aren’t determined by owners or Realtors, they’re set by “the market” – what buyers paid recently for similar properties in the same area.
Age and condition make a huge impact! Homes that are updated with modern interiors can go for $100K more in some cases.
Now for #2 – Negotiating;
This is the most difficult for my seller clients to understand, and is indeed a bit counter-intuitive. Sellers feel that if they don’t add 10-20% to their price, they’ll end up with less.
Ever play darts? Where do you want to be? In the Bull’s Eye! The highest “net” comes from pricing in the Bull’s Eye of today’s market values.
Properties priced strategically, even aggressively, generate the most activity, even competing offers – sometimes above asking.
Top 3 risks of over-pricing your home;
- Listings are over-looked by buyers who think they can’t afford it
- Buyers think sellers are non-negotiable and out-of-touch if the property is clearly priced too high. Even when I’ve begged buyers to write an offer, most pass and move on to a seller they view as negotiable
- As listings “age” – values drop. Doing multiple price reductions leads to a much lower “net” for sellers than pricing aggressively from the start. I’ve even had buyers see price reductions and play a ‘waiting game’ – to see how low the seller will go
What works? A strategy that combines aggressive marketing, pricing and strong representation. As a Certified Negotiation Expert, I’ll share with you tips and strategies to protect your value. For a detailed analysis of your property and what you can expect from today’s market – please contact me for a confidential consultation;