Pricing Strategies That Work
One of the most important parts of a Realtor’s job is to price a home in such a way that it sells quickly and for top dollar. There are several strategies an agent can use to accomplish these goals, but sometimes they sound contrary to what a seller thinks.
First, you want to encourage as many buyers as possible to not only look at the property, but to make an offer. Multiple offers create a bidding war, which brings out the competitive nature of buyers, making them want to win. Everyone likes winning! Also, when a buyer knows he is the only person making offers on a property, he is competing against the seller, and he tends to bid low. But if there is more than one buyer, he is competing against the other buyers, and the seller becomes the ally, or the judge, to be won over.
The best way to get multiple offers is to price your property on the low side. This has a two-fold effect of making buyers in the higher ranges think they might be able to get a deal, and the buyers on the lower end thinking they can afford more than they thought.
Another strategy that has been proven to work is to use the grocery store model of “just below” pricing. Instead of setting the price at $800,000, price it at $799,000, which is “under $800,000!”
Finally, in this world of internet buyers, you need to make sure your property shows up in the maximum number of preset searches. If you set a flat price at $799,000, your home won’t be seen by someone with a set range of $800,000-$900,000. Hence, the value-range pricing strategy. By setting a range price of $799,000-$850,000, you not only show that you really expect the price to be above $800,000, you also get your home seen by buyers with a max price of $800,000, a minimum price of $800,000, and a minimum price of $850,000.
It is important to also remember that pricing is not set in stone. Be prepared to adjust the pricing as time passes. You will know within a few weeks if you are priced too high. Set up a timetable with your listing agent, with planned price adjustments at scheduled intervals. It is possible to create bidding wars on properties that have been on the market a while, simply by lowering the price.
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Halcyon Real Estate Services