Many times recently I have had conversations about pricing homes with sellers. Everyone wants to make the most they can when selling their home. I won't tell you that setting an attractive price is important because you already know that. What I will share is that setting an extremely attractive price will many times net sellers more money. This seems counterintuitive does it not? Many times sellers say "You can always come down", "Let's just try this price" or "I don't want to give my house away". Many times is does feel like that when looking at the high sales prices of 2 years or even 6 months ago. In a declining market where buyers are being told daily that the market will continue to decline for another 1, 2 even 4 more years, buyers are leery to say the least. One warning to buyers was to not catch a falling dagger.
You may know that I personally invest in real estate. I have been thinking of buying another small apartment building. Recently, while was looking on the MLS (Multiple Listing Service) I saw a new building come up and seemed like a great price (about 10% below the other buildings). I went out right away and looked at it and although it was not the most desirable area it was a great deal. A little excited at this possibility I got back in my car and called the listing agent. I was shocked to hear him tell me there were 6 offers on this building and it was going to sell over the asking price. It did sell and it went $30,000 over asking. It was a great lesson of market pricing. Even if it looks like the price is set too low, many times buyers will overbid when this is the case creating an auction affect. After this experience, a friend sent me an article I will share with you.
Another unseen benefit of this strategy is that while the average market time is over 120 days in most markets here is San Diego, this strategy shortens time dramatically and in doing so sellers avoid following the market down. Some estimates have been that the market has dropped 10% since June. Imagine being on the market 5 months and now seeing prices 10% lower. This is why setting an attractive price is so important it will create and urgency and a desire for buyers to buy. And those looking to buy can get excited about the deals they are getting. Every one is getting what they want. If you are the seller you sell.
