Pricing Your Property

16 March 2016

Pricing Too High

Most sellers set a price too high or above the market value. The rational is that they can just reduce it over time and maybe they can get lucky. The truth is most properties sell in the first 30 days. Most showings are in the first week. When your property is overpriced you miss all that activity and you follow the market down. In most instances you end up with a lower sale price then if you started at market value.

The other problem is that the property will be on the market for weeks. If you are staging it, that can cost a lot of money. Also, you have to keep the property not just clean, but in show time condition at all times, and with children, that’s a real problem. So there is a lot more stress using this strategy.

Importance of Pricing Your Property

Pricing Too Low

When the market is hot (more buyers than listings) then everyone would love to receive multiple offers. How do you create that frenzy? List the property juts below its market price. The lower the price below market, the more offers you hope to get and the higher the sale price will eventually be, just like a sling shot. The advantages to this approach are that it should sell quickly. That’s ideal for clients with kids. Hopefully you will also get an unconditional offer. However, there are risks.

What happens if the best or only offer you get is just at your list price? Do you have to accept it? Legally no, ethically yes. How far over the list price do you have to go to get that market value? Going 100k over list price is a psychological barrier for many. What will the appraisers and lenders think of the final price? If the buyer is tight on financing this could also be a problem. So there you have it. Maybe it’s just better to list your property at market value.