WEA News

Letter From WEA: THE HIGHEST PRICE IS NOT THE BEST

After many years of experience at pricing single-family homes, I am more convinced than ever that there is no science to predicting the sale price of a home.

With multiple agents chasing each potential listing, hearing the highest recommended price may excite a seller. However, it’s important to remember that this agent is not making an offer to buy your home. Rather, they are likely teasing you in an attempt to secure the listing.

In studying sales over the past few years, it’s very clear that the homes that sell the fastest are the ones priced on the aggressively low side. How can this be? The answer is simple. If a home is priced low, there will be multiple offers. This approach not only drives up the price to market (or beyond) because of the intense competition, but the offers become cleaner and quicker. Loan contingencies are removed in addition to appraisal contingencies. I see this over and over again.

When looking at competition on the market, I notice the homes that are priced too high stay on the market much longer, have multiple price reductions, and risk getting “stale” due to market time. If you really want to sell then overpricing a listing and hoping for a lower offer to begin negotiating is not the way to go.

Starting with the highest price is not the best strategy. Rather, beginning with a lower list price results in the highest sale price and a cleaner deal. Think about it.