Pricing your home for today’s market requires a modern strategy. Some homeowners are reluctant to approach pricing differently from how they remember when they sold a house years ago. Those who recognize that competition generates ridiculously high prices and safe terms benefit by letting the market work for them.
The house down the street was $395,000 and sold for $450,000
Comparison pricing shows possibilities. Assume a home on the market for $395,000 in your neighborhood sold for $450,000; the comparison pricing method looks at this sale as evidence to support an asking price of $450,000. But, the approach ignores the fact that the price drew a crowd of people who would not pay $450,000, and it was the mass of buyers that created the environment for one person to overextend and make the ultimate offer. Without the excitement that creates a fear of loss, the hyperactive seller’s market vanishes, and it’s the same old balanced market where price and terms are all negotiable.
Price to attract the typical buyer to get the atypical one
Out of 5 buyers, maybe one person will offer a ridiculous price other can’t match. That person often comes into the picture late, knowing there are strong offers to beat. While they shouldn’t know the exact terms of other proposals, they may have enough information to know what price they can offer to win. The fact that additional offers are on the table inspires the one buyer to reach the highest. Four out of five buyers will be typically motivated. They will show up to see the house because the price feels right. They fuel the one buyer to offer more than they would without the fear of loss. Or the desire to win.
Trust the market. It’s worth it.
When we see people getting unbelievable prices for their homes, we have to look at the factors that created the environment to force a person to make that unprecedented offer. Give more value to asking prices than selling prices. The selling price tells you what is possible. The asking prices tell you the recipe’s first ingredient to bake that fantastic offer you’re looking for.