I’d like to talk about a hot topic right now… pricing strategies for your home. There are many factors that will guide this decision: economic reasons, pandemic issues, privacy, and risk tolerance, just to name a few.
Your sales representative should clearly present the options. There is no one size fits all strategy to home sales. If you’re unsure about the approach being discussed, there’s no harm in getting a second opinion before entering into a listing agreement.
Let’s consider the following: You will likely have a desired sale price in mind for your home. For our purposes, let’s call that $1,000,000. Depending on comparative sales prices for similar homes, you could choose to list your home below market value, at say $900,000, and see if you can attract multiple offers that will bring you to your desired price or higher. You could come to market at a price close to $1,000,000, making your intentions clear, and see if the market feels it’s worth that price. You could also list your home over that price, at say $1,100,000, to see if someone will exceed your expectations…you may achieve a price below list but it could still reflect your initial objective of achieving $1,000,000.
Each approach has its benefits and drawbacks. In the case of listing below your desired sales price, you may discover that buyers are aware that the list price is low, and choose not to participate in a possible multiple offer bidding war. In the case of listing your home above your perceived market value, you may find that your home is not registering on the searches for people with a $1,000,000 budget, and not of interest to those with a higher budget.
We also need to consider the current public health situation. By coming in with a lower price, you will likely expose your home to a wider audience. In normal times, this may be desirable. It leads to more showings, more opportunities to generate interest, and hopefully more offers. In pandemic times, it’s not desirable to have more people than necessary go through your home, so this should also be given consideration.
When speaking with your sales representative, you need to be aware of the potential rewards and pitfalls associated with any approach to pricing your home. The communication from your agent is crucial. Rely on them for guidance…they have a lot of experience to offer and their insight is invaluable. But never forget, the final decision on pricing strategy is ultimately yours.