How to get the most money for your house always a hot topic with sellers. Below advice to use a good realtor as your selling agent is sound.
However I often use another more aggressive pricing position when agent and sellers cannot agree on the expected selling price.
I have no objection to listing a house above the price at which I think it will probably sell, IF, the sellers are willing to take price reductions when the market place tells us that the price is too high.
How can we tell if the market place thinks the price is too high? I did research in lots of townships in our area and what I discovered is this:
+ If a house is on the market for 35 days and we have no offer, there is a 70% chance that we will not get an offer in the present market. At that point in time, I recommend a 5% price reduction.
+ However, it is always the sellers’ decision to do the price change or not. If they say no and the house is on the market for a total of 65 days with no offer, that means there is a 90% chance we will not get an offer in the present market.
Because the housing market is pretty efficient, we will probably wind up in the same spot whether we price a bit high or a bit low, but sometimes pricing a bit on the high side is needed to demonstrate the actual market value to sellers.
Every homeowner wants to make sure they maximize their financial reward when selling their home. But how do you guarantee that you receive maximum value for your house? Here are two keys and one alternative approach to ensuring you get the highest price possible.
1. Consider Pricing it a LITTLE LOW
This may seem counter intuitive. However, let’s look at this concept for a moment. Many homeowners think that pricing their home a little OVER market value will leave them room for negotiation. In actuality, this just dramatically lessens the demand for your house (see chart below).
Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.
Realtor.com, gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”
2. Use a Real Estate Professional
This too may seem counter intuitive. The seller may think they would net more money if they didn’t have to pay a real estate commission. With this being said, studies have shown that homes typically sell for more money when handled by a real estate professional.
Research posted by the Economists’ Outlook Blog revealed that:
“The median selling price for all FSBO homes was $210,000 last year. When the buyer knew the seller in FSBO sales, the number sinks to the median selling price of $151,900. However, homes that were sold with the assistance of an agent had a median selling price of $249,000 – nearly $40,000 more for the typical home sale.”
Price your house at or slightly below the current market value or feel free to price a bit above market value and be prepared to take price reductions if the market tells you that is what is needed.
Regardless of your original price position, hire a professional. That will guarantee you maximize the price you get for your house.
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