Let’s first make it clear that Sale Price & List Price are two very different things. List Price is a number you will use to draw in buyers while marketing your home. It is a number used for marketing purposes. When a property is marketed across various web and print platforms, there are a limited number of details that are always present. The List Price is one of them, as are the photos, address and floor plans.
Some apartments sell above, below, or at the List Price. There are various strategies to determine what your List Price should be. Some owners choose to ask a high price compared to comparable properties on the market so that they have more room to negotiate with a buyer. Others prefer to ask at or a little below the comparable hoping to create a competitive bidding situation and obtain multiple offers.
There are positives and negatives to each strategy, and the market also has a major effect on things. For example, if there are a lot of competing properties on the market, and you ask a high number, your property will probably not get shown, and you will lose the opportunity to negotiate in the first place. On the other hand, if you are the only property available, it might be worth more because of the lack of supply, and it might be appropriate to try and get a higher price by setting the expectation that you plan to sell for more.
The flip side is true as well. We often times find that when there are multiple bids, buyers get more emotional and are more attracted to the property. They say to themselves, “If all these other buyers like this property enough to make an offer, it must be a great property.” Or, they say to themselves, “This is a great property, and we don’t want to lose it.” Instead of negotiating based on what they think it’s worth, they negotiate based on the maximum they are willing to pay not to lose it. It becomes less about the comparable, and more about its value to them. Buying a home is a very subjective and personal experience and its value is determined by the maximum that someone is willing to pay for it at that given moment.
Asking a lower price sometimes means you will sell for more. However, there is a risk associated with asking a lower price. You run the risk that you won’t get as many bidders as you would expect, and now you are starting the negotiation from a lower price point. You also have to know yourself and your “risk appetite,” and know that you won’t look back after the sale is over and ask yourself, “If I had asked for more money, would I have gotten more?”
Pricing is always a strategy, and you have to choose the right one for you. When you hire a Meier Real Estate agent, we will discuss these factors with you and put you in the position to make a confident decision on your List Price.