When a seller decides to put their house on the market, they want to get the most money they can in the shortest amount of time possible.
A buyer wants to get the best house for the least amount of money.
Market value is what a seller is willing to accept and what a buyer is willing to pay.
In today’s technology driven real estate market, all homes will be viewed online before being viewed in person. The goal is to have the home viewed in person as many times as possible until an offer or multiple offers are received.
How does a seller get these views?
The answer to the question lies in the listing price. It’s in the seller’s best interest to price the house based on the houses close to theirs that have sold within the last 3 to 6 months (comps) and this information can obtained from a Realtor. This helps to keep the price competitive and will attract buyers to come view the home, fall in love and submit an offer. If the price is too high for the market, then the seller will risk the house not being viewed in person and thus sitting on the market for a long time and becoming “stale.”
Sellers need to remember that the buyer’s Realtor will be checking the comps to make sure their buyer isn’t overpaying for the home. What do you think will happen if the house is over priced? Either the buyer will move on to a house that is priced correctly or they will submit an offer that will be much closer to market value but in the eyes of the seller it will be a “low ball” offer. Reality is that it may not be a “low ball” offer but a realistic market value offer. The seller should save themselves the heartbreak and stress by simply pricing the house correctly from day one.
It is not recommended to over price the home or “test” the market and here’s why.
The first 3 weeks that a home is on the market is crucial. This is the time frame that the interest will be the highest. Buyers have already seen everything else on the market and they are keeping an eye out for new listings coming on the market. If a new listing is over priced then the buyer most likely will not be motivated to go view the house in person. If the house is priced correctly, then interest will be high and numerous showings are likely going to happen during this 3 week window. After the first 3 weeks, interest starts to level off or even decline which is why a seller needs to have a high quality Realtor consistently keeping up with the market trends to make sure the house stays competitively priced to the competition.
Does it matter what a seller paid for the house? NO
Does it matter what a friend, relative or neighbor says the house is worth? NO
Does it matter that the seller needs to get a specific amount out of the house? NO
Does it matter what it would cost to rebuild the house? NO
Why would a seller want to risk or lose the most crucial and valuable time at the beginning of the listing? Sellers should price their home according to market value based on the comps to sell in a reasonable time frame and for the most money possible it today’s real estate market. The real estate market is a moving target and the right Realtor will keep a seller updated to the market conditions and advise when price improvements are recommended.