How Sellers Price Their Homes
How Much Should I Offer?
We’re often asked by our clients, “How much under the listing price should we offer?”
This is an excellent question. The answer is difficult.
The main reason we emphasize the education phase of looking at homes is because that is the best way for you to know value. When you review and study 40-60 (or more!) listings, then drive by 10-20 and look at 5-10, you will recognize the “Hot Listings.” You’ll also recognize the “dogs.”
Sellers price their homes differently for 4 basic reasons:
1. Ridiculously Overpriced!
These sellers have listened to a real estate agent over-inflate the value of their home in an effort to obtain a listing. There is a natural tendency on the part of sellers to list with the real estate agent who gives them the highest promise. There is a tendency by some real estate agents to give the seller a high “value” in an effort to obtain the listing.
These homes can be 10-20% overpriced. These sellers may need a “dose of reality” for a few months before they begin to realize that their home is way overpriced as compared to others in the area.
The longer an overpriced home is for sale, the more likely we can get the seller to face reality and sell at a fair price.
2. A Little Overpriced!
These sellers fall into 2 categories:
• Those that feel their home is worth every penny of their asking price.
• Those that want to leave a little “negotiating” room.
These homes can be 4-10% overpriced. Perhaps 75% of all homes for sale are priced in this range.