It is often a mistake to list your home with the agent who suggests the highest price. While it is true that you can always “come down”, there are many factors to consider.
Firstly, the market is always looking for new listings. This means that the first few weeks your home is on the market will bring more inspections than any other time. All the buyers in the price range will rush to see your home.
Those buyers that have been looking for some time are the ones who have done their homework and are ready to buy. But they will also be the most aware of the market value of your property.
If your home is correctly priced it will make buyers feel they need to snap it up before someone else does. If the price is too high, they feel no such sense of urgency. Just as vendors take the attitude “we can always come down”, buyers think they will wait until the price drops.
It is often the case that a property that would have achieved $600,000 when first placed on the market will lose as much as up to 10% after being on the market three or more months and becoming “stale”. The longer your property stays on the market, the more buyers feel they have the negotiating power, which in turn generally means the lower the price your property will achieve.
AUCTION SELLING: No Advertised Price Selling Strategy:
With an auction sales strategy it is imperative that you encourage the entire market place buyer pool to inspect your home. This allows the individual buyer to make an assessment as to the price level they feel is appropriate for the property being auctioned, this price can vary greatly between buyers, that is why with an auction you should not advertise a price that may incorrectly influence a buyer in relation to price. To achieve the best price at auction you need to encourage buyers to bid freely up to their perceived level of value and this is done by not pre-empting the reserve price by means of an advertised estimate.
PRIVATE TREATY SELLING: Fixed Advertised Price Selling Strategy
With a private treaty sales strategy it is imperative that you start the negotiations with buyers from a position of strength. A fixed asking price gives the home seller the negotiating power by encouraging buyers at the correct pricing level to start negotiating. It is vitally important that the buyer starts negotiating as close as possible to the asking price to achieve a successful sale. What a fixed advertised price indicates to a buyer is that the advertised price (or better) will be the amount required to buy the property, however, the closer you are to that fixed advertised price the better chance you have to negotiate a sale price with the home seller.
To set the fixed advertised asking price home sellers need to take into account recent comparable sales, current comparable properties on the market, the local market price trends and current buyer demand and activity.
If you price the home right in the first place it will generally sell for a higher price in a more than reasonable time frame.