Overpricing In This Market - Why It Doesn't Work...
In this competitive seller's market, it's incredibly tempting for sellers (and their brokers) to make this common mistake: to overprice their properties when they first list.
Many sellers believe that because the market is so hot, that they can get away with asking prices in the stratosphere!
Even if a comparable home down the street just sold for $75,000 over asking price - this does not necessarily mean that it's a good idea to price your home in line with that sale. It’s usually a better strategy to keep your price in line with the asking prices of recent comparable sales, and not the sale prices.
This might seem counterintuitive to many sellers… but we’ve had enough experience testing these different strategies and the overwhelming results are clear: The lower the asking price - the higher the sale price tends to be.
Perhaps it’s best to use an example.
We recently listed a home in Lachine West in a prime location, close to the water and walking distance to parks and schools. This was a real “fixer-upper” that required a complete renovation - but it was a great opportunity for young families or investors alike.
A similar home had sold a few streets over about a month or so prior, in multiple offers for $572,000. The asking price on that property was $500,000.
Based on this comparable, we decided to price our new listing at $549,000, thinking that we would also likely get offers close to the $572,000 mark. Even at this price - it was the most affordable detached home in Lachine West.
Oddly enough - after nearly 3 weeks on the market - we had only received 3 low-ball offers well below our expectations - all 3 of which were refused.
We discussed pricing strategy with our seller and we agreed to drop the price to $499,000. The result? We had 7 offers on the table in a matter of 3 days and several of them exceeded the seller’s expectations. The best of the bunch has now been accepted.
The lesson to be learned is that asking more doesn't always mean you'll get more. Pricing your property for an effective sale is the most critical step. When you decide to sell your property, you want to sell it for as much money as the market will bear.
If you or someone you know is thinking of selling your home, don’t hesitate to call us. We will help you determine the right listing price in order for you to achieve maximum return on your investment. After all… ROI IS KING!Ⓡ.
Schedule your appointment with us today by emailing firstname.lastname@example.org or calling 514-613-2988.