Many times I will hear someone say “The Realtor made me price my home for $500,000” and that’s not the way I look at it.
The approach we take when talking about pricing for your home is we are a consultant. Although I certainly can tell you what price I recommend or I can tell you what I would do if I was in your situation my job isn’t to make that decision for you. My job is to give you so much information and advice that together we can arrive at the best decision for your situation.
Most agents only have 1 pricing strategy but in reality there are 3 ways you can price your house.
Aspirational Pricing
The first way to price your home is what we call “Aspirational Pricing.” This is a strategy where we are priced well above the comparable sales and we are looking for that needle in the haystack buyer.
Aspirational pricing is appropriate for a special property that has what I call a “feature stack.” A home with a feature stack is one that has several features we know are very attractive to buyers and also very rare to find in a home. An example of a home with a feature stack would be a home on a greenbelt with a pool and a 3-car garage. We are able to estimate the value of each of these features individually. Because it’s rare to find a home with all of these features the value typically increases significantly higher than simply adding up each feature.
The tricky thing about aspirational pricing is knowing which homes truly have a feature stack that buyers value and which homes don’t. If you use aspirational pricing for an ordinary home you will more likely price your home too high and your home selling experience will be frustrating.
At Market Value
The second strategy to price your home is at market value. This is where the majority of buyers, Realtors will be looking for a home like yours and where appraisers are going to consider your home fairly valued. This is the best strategy for most of the homes being sold today.
What we are finding in today’s market is the people who price at market value are getting offers way over asking price. In addition, this keeps your home from sitting on the market and having buyers ask us if you have any offers. Buyers start to think if nobody else wants the house then why should they buy it.
Price To Create A Bidding War
This is where a home is priced slightly under market value and we create a frenzy with our marketing and get a buyer to pay over asking price.
We have a system in place to generate interest when a home comes on the market and a great system to generate multiple offers so we are not worried about pricing too low. However, this may not be the best strategy for many homes because it is possible you will feel like you are leaving money on the table.
These 3 pricing strategies might sound confusing but don’t worry, you don’t have to make this decision on your own. Whenever you are ready to talk about the best pricing strategy for your home contact me at 512-791-7473 .
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