HOW DO WE ARRIVE AT THE RIGHT PRICE?
Pricing your home correctly is very important. It is not as easy as you might think. A "Comparative Market Analisys" (CMA) is a great start, but in most cases, it is not the only component in determining exactly what the right price is. There are many other factors to consider, making the actual process quite a challenge. As much as there is a factual basis in arriving at the right price, it is not an exact science. There is also a "gut" instinct or a feeling that comes from being an experienced agent. This "gut" instinct could mean your property is worth a lot more than you thought. This scenario has happened to me many times when making a presentation to a potential seller. In these cases the seller was shocked when their number was a lot lower than mine. You can imagine the jubilation when I proved it to be correct.
OVERPRICING
I can't stress this part enough... The number one rule about pricing your home is DON'T OVERPRICE IT!!
When we overprice, the same thing happens every time. Fast market... slow market... no exceptions! No matter who you talk to in this industry (providing they have some experience), you'll realize it is something we all agree on. The newbies will say "you can't reduce the price if you didn't have the listing" ... nothing works against you more than that philosophy. I will explain.
There are literally thousands of agents out there, working with even more thousands of buyers who have already looked at every relevant listing that meets their specific criteria. Many have been sold; some don't meet the criteria, and so on. They have already spent a week in the car with their agent, and have not found anything. Both agent and buyer are now experts in the area they have been looking. The last strategy left for that agent and the buyer, is to immediately pounce on any brand new listings. The buyer has been encouraged to be available right away, even if this would mean skipping work for a little while.
That's why the first two weeks of the listing are so important. All these buyers who are specifically looking for your home are going to see it right away. As I have already said, these buyers, having seen everything else, know exactly what your home should be priced at. If it's overpriced they will avoid it, and continue to wait for more new listings. I can't explain it any more simply than that!
STALE LISTING
So now that your overpriced listing has been avoided by all the best most qualified buyers, what happens next?
You will get showings and continue to get showings. However, the kind of prospects you will get will not have as high a motivation. They will be buyers from out of area, looking to see if they might like to move there. They will be buyers who are just starting to look, not really sure what they want. They will be neighbours and "looky loos" just trying to get ideas. There will even be Agents bringing their prospective sellers just to prove to them why they should be priced at lower than yours. A considerable amount of time has passed now, the best buyer prospects have bought other new well priced listings, and you are frustrated, tired, and even upset with your Agent. Your listing is now known in the industry as "Stale".
At the point of a "Stale" listing, usually over 30 days, there is a whole lot of another kind of interest. "Sharks!" These are the buyers who want their agent to show them only properties that have been on the market a long time. Why? Because these are the guys looking for a great deal, the ones that can see the potential of a flip. They know you are frustrated, and for sure, will give you a low-ball offer. After a few of these, you are either going to accept one of these offers, or you are going to tell your Agent to take it off the market.
If, after meeting, you tell me that you want to overprice your listing because you want to "test the market," phone another Agent! I don't need to test the market; I know what the market will bear! But, now that you are aware of the consequences of listing too high, and still insist to do so, I will only agree to do it for you, if you agree to this. I will list it at your price for 15 days. After the 15 days, if there is no offer, we must reduce. That's the deal. I do believe in occasional luck!
UNDERPRICING?
Trust me on this, pricing it right, even under pricing, is absolutely the only way to realize the highest amount possible. That's how we achieve competing or multiple offers. It becomes a bidding war, much like an auction. E-bay is so successful because of that very reason! More than one offer at the same time is the best possible scenario a seller can be in. To make this work flawlessly, and possible to get above asking price, you must have a very experienced Agent, one who believes that you my customer, my principal deserve only the greatest and best results I can achieve!
Pricing your home correctly in today's market requires expertise. Contact me for my current strategy in pricing it to sell! I will get you in a multiple offer situation and you will get the very top dollar! Contact me if you would like to know how I can achieve this.
