In pricing your home for sale, you can price it over market value to test the market/not leave money on the table, at market value, or below market value to encourage competition and quick sale. Which is best for our current Denver market?
Imagine a homeowner consulting with their agent about the price to place on their home. The agent suggests that the market data indicates that $400,000 to 410,000 would produce a quick sale by pricing it properly. The owner puts a $410,000 price on the home.
The first person who looks at the home offers $405,000. When the seller receives the offer, he comments that he thinks he priced the home too low and counters for full price. The counter-offer is rejected, the home stays on the market and at the end of the first month when based on market conditions, the home should be sold, no other offers have been made.
It may be human nature that when an offer is received so quickly, the first thought to come to mind is that it was priced too low. A more appropriate thought might be that it was priced correctly. In some cases, when a home comes on the market, there is increased competition (real or perceived) among the buyers waiting for the "right" home to come on the market. The home can sell for a higher price than if it sits on the market for several months.
The wisdom of experience advises owners to find a real estate professional that they trust and have confidence. Allow that professional to become familiar with your home and compare it to similar homes in the market that have sold recently and ones currently on the market. Determine the demand for homes in the area compared to the inventory. Decide on a price that will allow the home to sell within a relatively short period of time. And lastly, be satisfied if your home sells quickly near the price you put on it.
In Denver's current market, we're seeing homes sit on the market without offers if they are priced over buyer's perceived market value. Buyers know that properties are selling quickly for list price and above. When buyers see a property that they feel is overpriced for the market, they don't make an offer - they move on to another property or wait for a price drop on the overpriced property. Properties that are overpriced end up selling for less than what they would have if properly priced when first listed.
Want more info or a market valuation for your home? Call me! Kathy Surges, Coldwell Banker, 303-981-6170