Much like the dreaded cockroach, this theory just will not die. As Realtors, this is probably the most common and most statistically unfounded Real Estate myth out there.
I understand its origins. If I’m going to sell a truck, I’m going to price it juuuust above what I really want for it. Bedroom set? Same theory. We expect that the Buyer is going to want to negotiate and the price will ping-pong along until a lower but acceptable number is reached. With this logic, WHY on earth would you start below what you want?
The difference is that we are not selling trucks or bedroom sets where your buyer pool is pretty ‘fixed’. In Real Estate, the size of your Buyer pool depends on the demand that is built from competition, marketing and most importantly, the allure of the ‘good deal’.
People want what other people want and a house that is aggressively priced will almost always sell for more money than one that is priced high. Add that to a Sellers Market and you have Buyers pushing list prices up by as much as 10%(!), waiving inspections and foregoing Appraisals.
Wouldn’t you LOVE to be a Seller with two or three Contracts* on your home that are over list price, As-Is and ready to Close regardless of Appraisal? Build that buzz and let the Buyers WANT your house versus the ping-pong effect.
REMEMBER – the lower your listing price, the BIGGER your Buyer pool. Combine that with excellent marketing (especially a strong Premarketing Plan like ours) and you will see sale prices MUCH higher than if you’d started above Market Value.
The Day to Day View – How it Works
|List Price||Days to Offer||# of Offers||Sale Price|
|5% OVER Market||$210,000||60||1||195,000|
|5% Below Market||$190,000||1||6||206,000|
$16,000 above list price?! Yep. We see it all the time.
Look at the numbers, work with Realtors you can trust and have faith – PRICE IT TO SELL AND SELL IT WILL, for much more than you think.
Curious where your house should be priced?
We can help with that – 970-460-4006
*Yes, you can (and should) have multiple Contracts on your house. See our post on ‘Backup or Bust‘ for more info.
Photo Courtesy of Flickr – @sdixclifford