We talk with Chris on the benefits of pricing below market value in a hot market.
"We should talk about is the strategy of pricing your home when you're going to list it.
One of the things that a good agent's going to do is they're going to run a comparative market analysis. This will determine the value of your home based on how other similar homes have sold.
Most people obviously want the most money as possible for their home and as you've heard that this is a sellers market. It really is for the first time home buyer price range- between 100k-150k on up to even 250,000 that they're going pretty quick.
Say you're at market value, your house is worth $240,000 market value. 60% of the buyers out there in that price range are probably going to come take a look at it. If you move it up 10% you're down to 30 if you're 15% above purchase price, you're down to 10%. Which is really nothing and there is going to sit. If you're 10% below values, I said 240 so that's $2,400 it's really not a lot of money. Right? 75% of the buyers taking a look at it. Go even lower and then suddenly everyone that's in the market for a home in that price range is looking at your property. You're going to end up with multiple offers and this is considering we have priced it correctly.
What I have seen with multiple offers happening, you get numerous benefits. Personally right now in this market, in the first time home buyer range, I think under pricing a property is much more valuable tool than pricing it right at value.
Pricing a 10% below value you're going to have 75% of the buyers actually taking a look at it.
Now on a $240,000 home, marking it off $24,000 seems stupid and I would never recommend that
However, marketing it a few percentile under value, say 2% on $240,000 home, which would be $4,800. That doesn't seem like a lot of money now. . And you're going to end up with more than likely multiple offers.
I wrote an offer last week and we chose this strategy. The property was marked about $10,000 under market value. There were showings all day long. They had over 10 offers within 24 hours My folks were willing to write $15,000 over asking price with no inspections and still did not get it. Spoke to another agent we ran into at during our showing, they actually started offering where my folks ended and no inspections and they didn't get it either. In a hot seller's market, under pricing strategically can result in a bidding war amongst buyers.
Any time you have people competing for your product, you're in a better position than if it's just a one-on-one. "