Here are three basic home pricing strategies that work in any market.
Today I’m going over the three pricing strategies that sellers can use in any market. We’re not talking about the inherent value of a home. Instead, we’re talking about the tactics sellers can employ to get the most money for the property. There are three basic ones: pricing a home above market value, at market value, or below market value.
Before we begin, the one caveat is the actual value of the home. We recommend different strategies based on how much your home is worth, so the optimal strategy may differ based on your property. Now let’s talk about the three strategies:
1. Pricing a home above market value. The advantage is that you might find the perfect buyer and set a new record for the area. On the other hand, the local agents may reject the property, realizing that it’s overpriced. Also, homebuyers may not even see the property online because of their pre-set price ranges.
2. Pricing at fair market value. This strategy is predictable. You’ll have a better idea of when the home will sell and for how much, but you might be shooting yourself in the foot. As a seller, the more offers you get, the more leverage you have to get better terms and prices. At fair market value, you may not attract as many offers as you could have.
3. Pricing a home below market value. The goal of this strategy is to create a bidding frenzy. The most serious buyers will have experienced agents who know the price is intentionally low. Those buyers will make offers at a great price with great terms, meaning you’ll be able to choose the terms you want. The downside is that some of the buyers may be underqualified for what the home will actually sell at.
Again, I’ll mention that the best strategy depends on the price point of your home. The buyer-frenzy strategy isn’t always the best one. If you want advice on how to best price your property, please call or email me. I’d be more than happy to talk with you.