Don’t. Overprice. Your. Home.

Tyson HinschbergerAdvice, Real Estate News

I’ll be blunt- you cannot overprice your home in this market. To do so is to miss capitalizing on one of the best selling markets of our time.

You’ve heard your friends talking about the sales values that have blown them away of late. All the wildest sales have one thing in common: The houses were not overpriced. In fact, in most cases, the houses were underpriced.

Underpricing is helpful in a number of ways. For one, buyers’ expectations are slow to adjust to the market. If someone had been looking at an $800,000 home 2 months ago, it may have looked much more attractive than a home that will sell for $800,000 today. The trouble is, if they don’t perceive the value your home is offering at its new valuation, they may be reluctant to even come and see it. You need a sharp price point to get buyers in the door.

Secondarily, you will want those buyers who may not see the home’s full value to still submit an offer on your home. Competition amongst buyers is the biggest contributor to the sales figures that we’re seeing. Not only does competition encourage buyers to submit their top dollar offer, but they will try and make their offers as lucrative as possible in other ways too, with bigger deposits, fewer conditions, and the closing date you’re looking for. You don’t get any of that motivation on an overpriced listing.

If your home is on the market for longer than 7 days in the current market, be aware- the vultures are circling. Your property is now stigmatized, and the savvy buyers are looking at ways to take the property off your hands for less than its market value. And they know they have a good chance to do it given other buyers’ reluctance to pounce already.

If you’ve ever been to a live auction, you know what the adrenaline and fear of missing out can do. There is only one home like yours, and people want it. That same fervor can be found in the heat of a multiple offer situation. But you can’t reap the rewards of multiple offers if you’re not set up to get them.

Multiple offers lead to outcomes worth celebrating. Savvy list prices lead to multiple offers.

So what’s the strategy?

In the simplest way: List it low and watch it go.

Price the house on the low-end of comparable sales. If you use a sampling of past sales, they are already out of date; but what it does do is shows you what many buyers are used to getting for the price you’re going to ask. However, there’s a reason those buyers are still in the market- they haven’t been successful yet. But while they continue to compete, more and more buyers have entered the market, propelled by sky-high sale prices & low interest rates. So put a teaser price on the home & rely on a Realtor with three core competencies:

  • Getting people in the door through great advertising & a well-designed listing (photos, tour, video, web, copy)
  • Strategizing (choosing that list price & offer date relative to other listings in the market)
  • Intuition (knowing which offers can be squeezed, and how to turn down bully offers)

When your Realtor tells you what your list price should be, don’t worry that it’s less than you’re looking for. If they’ve done their homework, it should be less than you’re looking for. A lot less. Trust the process.

To discuss the best strategy to sell your home & move on, contact a Planet Realty broker or salesperson today. Don’t leave money on the table by going about this the wrong way – markets like this don’t come around every day. Get expert guidance that will make a world of difference.