Strategies for Pricing Your Home to Sell Fast
If you were in the mall and saw one cell phone for $400 and one for $399, can you guess which one blows off the shelve in record numbers? While on the surface it might only be one dollar difference, retailers understand that psychologically, $399 feels like you’re getting a deal. The same goes for real estate, there are many tricks that real estate agents employ to move listings faster. Think about it, a house for sale at $399K just feels cheaper than a house listed for $400K, even though its a difference of a grand.
There is an exact science to this, and your Realtor is going to employ strategy and psychology, to price your home to sell fast.
1. Stimulating the Herd Mentality
Regardless of how much time and effort goes into researching the surrounding neighborhood to come up with a price for your home compared to others in the region, you’ll still need to reach the right buyer at the right time. Your Realtor is suggesting a lower price but you feel that your home is worth every bit of $400,000 because of the fair market analysis report and you’re hoping to find people that are willing to step up and pay your asking price so you stand firm. What can happen in this scenario is that other sellers are all targeting the same $400,000 buyers with the market flooded your listing can go stale very quickly.
When you are selling your home and need to move fast, your Realtor can employ a little trick to stimulate herd mentality and create a rush of excitement about your home. Your Realtor will determine your absolute bottom dollar you’ll accept and still feel like you made money, then promote the property at that price to create interest in several potential buyers.
By pricing the house at the lower end of your perceived value range, you stimulate interest in several buyers, which might result in a quick offer or best case, a bidding war.
2. Slipping in Other Realty Searches
The time has come to sell your home and you have determined based on the fair market analysis report that you need to get the house listed for $410,000 so you can make a decent profit. You also want to sell fast, but you are hesitant to lower the asking price from the start. You want to leave it at $410,000 and test the waters a few months, then drop the price down after there have been no serious offers. In this scenario you are most likely missing out on a huge burst of initial traffic, and risking letting the property get stale on the market. Drop it now, and here’s why. When people are interested in buying a home, they tell their Realtor to send them listing up to $400,000 range. That automated search misses your home by $10,000, so you lose out on a ton of potential buyers who have a $400,000 cap.
Three months from now when you drop the price, you may have already missed out on dozens of potential buyers who were searching just under your price range.
3. Stop Trying to Be Creative
Your Realtor has determined your home is worth between $430,000 and $450,000, and they suggest you list for $439,000 to get a nice amount of potential traffic through the door. In your effort to be creative and stand out from the crowd, you want to list the price for $444,444 and won’t allow your Realtor to convince you otherwise. Your hope is to call attention to your property for no other reason that the oddball number you selected. Although your Realtor is trying to explain how their number has a psychological connection to buyers, you stand firm and want your crazy number. Look at it this way, your home is like the pink house on the street when all the rest are white, leaving buyers wondering why you chose that number and what might be going on behind the scenes.
You are creating attention, but not the kind you want to move your house fast. Your Realtor has to try to keep you and your personality far in the background if they want to move the house fast. This is why real estate agents suggest you clear out personal belongings before a showing to showcase the home, not the home seller.
4. Creating Pricing Contingency Plans in Advance
One of the issues many sellers have with Realtors is that they think the Realtor wants to sell the house lower to move the house fast and bank a commission quickly. These sellers want a higher price, but don’t realize the consequences of listing too high right out the gate. Asking top dollar at the start might sound promising, but ask any Realtor what the reality of the situation is. Unless there is a scorching demand for property in that market and price range, the house will sit for a while. One simple strategy your Realtor will employ is creating a pricing contingency plan at the start, to avoid any confusion down the line. Before the house gets listed, your Realtor will list for the price you feel you need, but will have a plan in place everyone agrees on that shows the house drops to a set number after a set time, and so on and so forth.
Once everything is on the table, it will allow the sellers to get their way early on, and also position the house price-wise to appeal to a wider audience quickly so the listing doesn’t get stale. This helps set expectations at the start, and get the right buyer in quickly.
When you are selling your home, you must trust that your Realtor has your best interests at heart. They know you want top dollar, but they have to correctly balance the price against the pool of buyers, in order to get the listing sold fast. Your agent knows what works, knows what doesn’t, and is not going to just utilize some cookie-cutter formula to move the listing.