Thoughts on Pricing - Agents/Brokers only please (contract, Realtors, listing)
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I had an interesting conversation with an agent at an open house the other day where we were discussing "correct pricing." This agent has a client who's house he's listing in the coming weeks. The seller and agent have agreed the price should be $119K. The seller and and agent are confident this is the right price and the house will go quickly. I know all agents/sellers can be overly hopeful, but in this instance let's just say this is the true price and what the market will pay. $119K is also the LOWEST the seller is willing to take.
Would agents on this site recommend putting the house on MLS for 119K or bumping it up to 124,9K for wiggle room? The price increase could potentially eliminate it based on the area it's in.
My thought was to price at 119K and seller doesn't have to take anything other than full asking if they don't want to. Thoughts?
You price the home where the comps indicate you can. If raising it by $5,000 means it is too high for the neighborhood, then it is too high. Don't go there. I guess if the market is indicating that people will pay $119 and not $124, then price it at $119. The seller will just have to counter at full price offers, and let potential buyers know they can't come down.
If the seller has to have $119 then they will have to hold firm and hope someone is willing to pay that. At the lower price points like this, at least out here, there doesn't tend to be a lot of lowballing. There just aren't that many listings available in that price range.
What's up with "wiggle room?" If you give yourself wiggle room in this market, you might just wiggle your way out of an offer for a client.
By bumping up the price you could eliminate potential buyers. If the market price dictates $119,000, I agree the seller should list at this price and hold firm. Once you start negotiating the price, buyers tend to think you are desperate.
Thanks all...I agree about "wiggle room" other agent's idea - based on today's market here all buyers are offering lower than asking...sure that's true everywhere.
Well I keep getting told it's a psychological thing. So when offers come in, counter full price but give in something. Such as we're countering with full price but, we'll give you a home warranty or we'll leave something in the house that isn't on the listing. This way they are getting 'something' and can feel better about it.
I'm confused. If $119k is "the right price" and "will sell quickly", then I'm assuming there's very little inventory or that $119k is a bargain price. Yet I'm also hearing that your market is slow enough that buyers are making offers below list price.
If the agent expects to have to negotiate a $119k contract price, I don't know why they'd want price the home at exactly the lowest price the owner can accept. The only way you could do this would be if the price is so good that you expect it to bring multiple offers, or that buyers would perceive that it could bring additional offers. If buyers feel the price is nothing special then you know they'll be making offers lower than the list price.
Unless it truly is a "steal of a deal" I would give the seller at least a little wiggle room. Maybe $120,900 or $122k.
When I discuss this with my clients I always put it in terms of their strongest negotiating position.
If you price your house with (or in today's environment - UNDER) the market - you will get more activity and the likelihood of more offers. To be able to negotiate on an offer (or two) in the first few weeks of a listing period keeps a lot of strength in the hands of the seller, doesn't it? Once the DOM stacks up...and the price has been reduced once (or two or three times), the seller's hand is much weaker - even IF the house is now priced with (or UNDER the market).
I had a conversation with a young man last night regarding listing his home. He doesn't have much equity and if he wants to sell it he'll have to price it in such a way that he may not have much room to negotiate (at all) with out bringing money to the table. Ultimately, maybe its not the best decision for this seller to even put their home on the market now. Nobody needs another house that won't sell in the already over abundant inventory!
It is interesting that Realtors and Sellers think they make the price.
A house is worth what someone is willing to pay. If the highest offer is $115,000 the seller would be making a huge mistake not to accept it.
Much good luck!
Kevin O'Shea
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