The 3 Pricing Strategies of Selling Your Home.
So, it's time to sell your property. It is a seller's market, they say. What does that even mean? It means more people are moving to the First Coast, rather than leaving (because it's a great place to live!). The population growth along with the rising interest rates are creating a seller's market, it is creating urgency for buyers and sellers to do their business now. In the last four years, the metro Jacksonville area has experienced significant growth. Forbes rated Jacksonville as the 5th fasted growing city in America.
The time to sell is now and the need to buy is evident, creating an awesome market for sellers. Let's figure out what strategy you need to employ to get the most for your home. Keep in mind, none of the following strategies are are right or wrong. Your agent should always help you assess what is best for your home.
The three highlighted numbers in this image below show us three things. These are numbers pulled all markets. For a breakdown of specific areas and subdivisions click here.
1. Prices are higher than they have have been in the past.
2. The second highlighted number shows the difference between listing price and sales price. On average buyers are getting about 8k below the asking price.
3 Average days on Market for a home on the first coast is 72 days.
1. Price High, Sell acceptable. This involves listing your home above market value and accepting an offer below asking price. If you are not in a hurry to sell your home, this may be for you. Pricing a property well above market price can often produce a buyer, but it may only produce one buyer. Technically, that is all you need to sell your home but he more buyers the better in this market.
In today's real estate world, buyers can gain access to market statistics like never before. If you overprice expecting a person to overpay, it will be unlikely that a deal will get done. With research and numbers being compiled from Zillow, Trulia, and third party sites alike, the home buyer has a lot of knowledge about the market. Sidenote, third party sites like Zillow and Trulia can be wildly off on estimations since they are based on national algorithms that can be inaccurate and not in tune with the local market. If you add a good buyers agent to their side, they won't purchase a home that is overpriced. However, it only takes one person to fall in love your with your home. Be prepared to lower the price every couple of weeks if you are going to try this model. You and your agent should also discuss an aggressive pricing strategy prior to listing. Make sure you stick to this and understand its part of a process. You should get an offer for what you need eventually, but don't be in a hurry.
2. Fair Market Value. This seems simple right? Ask what the property is actually worth based on comparable sales. Do exactly that and you will have at least a couple of offers faster than you can say "Matty, can you sell my house?"
Trusting your agent to select a pricing model that will generate offers is sometimes hard to do. As homeowners, we always think our home is worth more than it really is, including me. It's natural, you raised your kids there, you have great memories of holiday parties and you did SO much work on the property. Understand that everyone did the same thing at their home too. Your house is special! It's special to you and that means a lot, but not on the open market and not to a seller that is looking to find something for fair market value. This strategy should produce great results and sell a home in this market in 30 days or less. If it's priced right and there are multiple people interested it might produce a highest and best offer above the asking price. That is ultimately what we would like.
3. Price Low, Create a Bidding War. Need to sell your home quick? Creating a bidding war and instantly wanting to go a highest and best situation can be the ticket. Pricing the home slightly below the market value can often generate offers above the asking price and drive the price up when multiple buyers are interested.
The negative of this model is often you will have people who don't want get into a highest and best situation and may pull their offer, thus decreasing the buyer pool. But again, we only need one buyer, so this isn't that big of a negative effect. This model should produce multiple offers in the first 72 hours of hitting the open market. You select the best-qualified buyer in combination with the highest offer (See post about "Highest and best: Explained") and hope that financing and inspections go through seamlessly. If not, you already have multiple people interested and should have a solid back up offer to accept if the first buyer backs out.
These are three pricing models to sell in any market really, sellers or buyers. They all have their positives and negatives and largely will all produce the same result. We never know what the future holds in real estate, we only have history and our speculations. Based on your situation, talk to your agent and see what they recommend. feel free to be open about what pricing model they suggest and why it's your home and ultimately you have a choice in how its sold. You also need to heed the advice of your agent and work together to have a solid plan based on your needs.