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It's only human to want the most money when we sell our homes. Some sellers believe that the price they financially need to get is the price the property will sell for. That's not what drives price and is a recipe for disappointment and a lengthy sales cycle.
The market drives the price. Market price is what a willing, ready and bank-qualified buyer will pay for a property and what a willing seller will accept for it. It's as simple as that. Without someone willing to pay your price, there will be no sale.
Think of pricing as a strategy designed to attract maximum interest and traffic. If a property initially hits the market overpriced, you won't get much interest. Lowering the price later just signals desperation and invites low offers. If it's initially priced too low, you will only attract lowball offers. Here's why your pricing is so important:
This image illustrates research done by Keller Williams. It shows the that the number of potential buyers who will look at your property is directly related to your pricing's relationship to market value. As you can see from the graphic, overpricing drastically reduces the exposure your home will receive. Of course, there are times and properties where pricing above or below market may be the best strategy. This depends on the property, the current market and your needs.
What this image illustrates is something that every buyer operates by. Put yourself in the shoes of the buyer. Really pretend to be a buyer for a few minutes. Are you going to take time to go see overpriced properties? NO! You'll pass on them until the price comes down. Actually, it's highly unlikely that you'll ever go see them. Why is that? Think about what overpricing signals to the potential buyers. They're going to imagine a battle with you (the owner) to get the pricing down to market price. Overpricing is an obstacle to engaging the interest of buyers.
Here's another graphic that is a result of Keller William's research. What it shows is that the first 4-6 weeks is when the majority of offers are received. That's the time that your home is "fresh" on the market, and you're going to expect the most activity (open houses, private showings, agent inquiries). We want to work with you strategically to maximize that activity and have the greatest possibility of receiving offers during that time of freshness.
Let's look at a few of the things we can reasonably interpret from this graphic.
Though it's not directly illustrated in this graphic, here are a few other reasonable assumptions you can make.