What Does a Seller’s Market Mean for Your Listing Price?
Many areas of the United States are experiencing hot seller’s market for the second year in a row. Which means that this is an exciting time for the sellers. Houses are selling within days of listing and for over the asking price.
But, what does that mean for choosing your original list price? Should you list it high because buyers are willing to pay more right now? Or, should you start low and see if you can get a lot of interest on your house to start a bidding war?
The listing prices is something that sellers struggle with all the time. Here are a few pricing strategies to consider when competing in a seller’s market.
Choose a low list price
This may sound like a crazy idea for sellers that want to get as much money as they can from their house, but many sellers are finding that this strategy is working for them. When you list below market value it draws a lot of attention to your house. This is a good way to start a bidding war because you’re getting in front of a lot of buyers who feel like they can get a great deal.
However, this strategy can backfire if there’s not a lot of hype created around your house and you only end up with one low offer.
Choose a high listing price
If you aren’t as concerned about selling quickly and are more concerned about the price you’re going to get for your house, consider listing on the high side of the market value. You aren’t going to want to go more than 5% to 10% over what the market value is of the house. That being said, when you choose this listing strategy you need to be aware of the fact that you may lose getting in front of potential buyers.
Real estate buyers are very educated on the value of the homes that they are looking at. They are going to know if you are listing over market value and, even in a seller’s market, they may not be willing to pay that.
You also might run into a problem when the appraisal happens. If your house does not appraise for what it needs to in order to support the purchase agreement, you will need to renegotiate the price or the buyer will need to come up with additional cash.
Choosing to list at market value
Sometimes you can’t go wrong with coming in at just the right price. Have your home assessed to determine what the fair market value is of your home. Then list at that price.
This is still a good way to sell quickly because buyers know that they are getting a house worth the money they’re paying. And in a seller’s market, you may still generate multiple offers by listing at market value.
The best way to choose the right listing price for your house is to put in the effort to research the local market. Go through the comps around your area to help you determine exactly what you should list at. And from there, be ready and able to execute on a strong marketing plan.
