Pricing Your Home in a Buyer's Market

I spoke with a client today, helping him to understand the best way to price his home in the current market. My goal was to retool his thinking. His original thought was if we priced his home about 5% over market value, a potential buyer would come along and naturally negotiate down to a number that he, the seller would be willing to accept. In the past, this was an approach that worked. It wasn't rocket science. Naturally, most people want to "feel" like they're getting a deal. Today, things are different and hoping that someone will be interested enough to make an offer cannot be depended upon. Basically, "hope" is not a strategy. Homes are sitting on the market longer than in times past and the longer a house sits on the market, the more likely it will become "stigmatized" even thought there is nothing materially wrong with it. Ultimately, this can be the kiss of death for a property. Needless to say, this is not a dependable plan.

Today calls for a new a different strategy. An old action that still applies would be to have your home's interior and exterior "freshened up" and professionally staged. Additionally, I would suggest having a pre-listing inspection performed. This is an investment on your part, but it can help to give you more control during the negotiations during the option period, after your Buyer has had THEIR inspection performed. You see for every dollar of repair needed, the Buyer will typically ask 3-4X that amount. The reason for this is caused by Buyer's remorse, a natural thought process the Buyer is experiencing.

Lastly, in order to regain some control in what seems to be an uncontrollable situation for a Seller, I suggest you and your Realtor price your home AHEAD of the market. By doing so, your home will stand out amongst the competition and sell quicker and for more money. This will take some of the control out of the Buyer's hands and put it right back into yours.

It works beautifully. This week, after listing a home for a Seller with just this approach, the property went under contract for full price, in a multiple offer situation! We also have a back up offer in place, should the first position contract fall off. As you can imagine, the Seller is very happy they listened and put their trust into the hands of a full service professional.