Pricing strategies to attract multiple offers
Attracting Multiple Offers for Your HomeOnce a homeowner has decided to sell their home, in most cases, the goal is to get the most money they can from the sale. How is that achieved in today's market? Here we are in the summer of 2013 and homes are selling faster than they have in many years. That doesn't mean that every home on the market gets sold or even that every seller got the best sales price, the best terms, or the most qualified buyer.
Since 2008 I have listed and sold many bank owned properties. For several years, more than half my business came from the countries largest banks. Bank owned properties are usually price aggressively, so I have seen the multiple offer scenario play out many times. With relatively few exceptions they sold for more than the asking price and even well more than what they were worth. Have you ever been to an auction and seen someone pay way more for something than you thought possible? That has been happening in real estate here in Florida and other parts of the country. Smartly priced homes get the auction mentality. Overpriced homes do not.
Sellers have different motivations for selling. Some will only sell if they get their fantasy price or "make me move" price. Those are the listings that, even in today's hot market get no action and usually expire unsold. Others have a real need to sell and the best way to squeeze every dollar you can out of a buyer these days is to attract multiple offers. I will suggest sellers use that same pricing strategy the banks use to attract multiple offers and ultimately end up with the most money for their home.
I am not advocating under-pricing here. If the property isn't a foreclosure buyers may wonder what is wrong with it. What I know to be true is the closer a property is priced to its market value, the more buyers will be attracted to it and the more offers it will get. The more offers it gets, the better the final sale price will be. Without a doubt I have seen more buyers overspend on a property that looked like a good deal than overspend on an overpriced listing.
I don't want to give it away.
Conventional wisdom says you need to allow for some negotiating room in your price. Not today you don't. If you can attract multiple offers you can let the desperate buyers employ the auction mentality and push the price up beyond what you would normally expect. By pricing smartly and aggressively, you actually gain control because now you can pick not only the best offer but the most qualified buyer. To price smartly, first you need a quality opinion of value and then price the home within 1 to 2% of that value. Cash buyers are attracted to good deals. They also like to flex their muscle in a competitive multiple offer situation. Wouldn't you prefer to have a contract you know will close and not fall apart due to the buyer not being able to get a loan, after you have packed everything into the movers truck?
In order to price your home correctly your agent needs to know how to value a home properly. For me to gain the banks foreclosure business I first had to do hundreds of Broker Price Opinions (BPOs) and do them accurately (and for very little money I will add). It wasn't until I demonstrated my ability to price a home correctly that I got their foreclosure business and kept it. Along the way I also learned how to maximize a properties selling price. It works for the worst of homes and the best of homes. Price alone doesn't sell a home to its maximum potential. There is more to it than that. The rest is a subject for another article, however.
Other pages that might interest you
Good pictures in a listing make a big difference. That's why I hire a pro.
Low Ball Offers and How to Handle Them
Comments(0)