How Seller Set Their Asking Price
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To determine how much to offer for a home you're interested in, you must first understand how sellers price their homes.
Here are 4 common strategies you’ll start to recognize when you begin to view homes:
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Clearly Overpriced:
Every seller wants to get the most money they can for their home, and real estate agents understand this. If more than one agent is competing for the listing, an easy way to win is to quote the seller an exorbitant price. This happens far too often, with many homes priced 10- 20% above their true market value.
Unfortunately, this is not in the seller’s best interest, because in most cases the market won’t be fooled. As a result, the home could languish on the market for months, leaving the seller with a couple of important draw – backs:
- The home is likely to be labeled as a “troubled” house by other agents, leading to a lower than fair market price when an offer is finally made
- The seller has been greatly inconvenienced with having to constantly have their home in “showing” condition… for nothing.
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Somewhat Overpriced:
About 3/4 of the homes on the market are 5-10% overpriced. These homes will also sit on the market longer than they should. There is usually one of two factors at play here:
- Either the seller believes in their heart of hearts that their home is really worth this much despite what the market has indicated (after all, there’s a lot of emotion caught up in this issue), OR
- They’ve left some room for negotiating. Either way, this strategy will cost the seller both in terms of time on the market and ultimate price received.
Another Blog to Read: What Are the Benefits of House Staging
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Priced Correctly at Market Value
Some sellers recognise that real estate is a component of the capitalist system of supply and demand, and they will price their homes carefully and realistically based on a thorough analysis of other homes on the market. These competitively priced homes typically sell in a reasonable time frame and for close to the asking price.
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Priced Below the Fair Market Value
Some sellers are motivated to make a quick sale. These homes receive multiple offers and sell quickly - usually within a few days - at or above the asking price.
Thinking about BUYING or SELLING a Home,
Richi Khanna can help you and if you have any questions in regards to real estate, then you must call Me today at
647-997-1281
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