Should you Price your Home Higher to Leave Room for Negotiations?

This is a common question that sellers are asking when listing their home. We want you to be prepared

when it comes to listing your home and we want you to feel comfortable with pricing your home to sell.

Here’s what you should know and understand from the buyer’s perspective on the pricing of homes.

Let’s say you decide to price your home higher than what you’d accept as the selling price.

What will happen after that? Buyers will be looking at other homes. Most often, buyers have been

pre-approved for a mortgage when they start looking at potential homes. When pre-approved, they

have a certain range that they can afford so they will be looking at homes within that price range.

Before listing, you were likely advised by your agent of your home’s competition; those homes

actively for sale, other homes you will be competing with to get your home sold. If the other

homes are priced to sell and within their price range, buyers are going to be looking at those

homes instead of yours. Remember that the longer your property sits on the market, the lower

the price may be.

Qualified buyers may not be seeing your home. The buyers that can actually afford the real

value of your home will never see your home because they are seeing your competitor homes for sale.

Ideally, the qualified buyers should be able to see your property along with the other buyers

who may have interest in your home. It may have all the right criteria but if the price isn’t right,

then it won’t show up in their search. Most likely, they will be seeing homes that have better/different

features and that are larger compared to your home.

Buyers are in the market to find a home they can buy. When buyers have decided they want to

buy a home, they want to buy NOW. They don’t want to deal with negotiation after negotiation.

Once they’ve looked at several homes, they will review the homes that they’ve seen that are

within their price range and that meet the criteria they want. Once a new home comes on the market,

they’ll be all over them and ready to look at it as soon as possible. This means they won’t have time

to even look at homes priced out of their range. With that being said, the first few weeks that your

home is on the market are the most important. It will bring the greatest amount of buyer activity

because your home is fresh and new to them.

Typically, homes that sit on the market longer will be less desirable. A property that isn’t fresh to the

market is less desirable to buyers. They can only imagine the many different reasons as to why the

house isn’t selling. The perception of the value of your home will start to decrease because of this.

Buyers are going to start making lower offers due to the amount of time your house has been on

the market. Once buyers see that your house has been on the market for a longer period of time,

they are going to assume you are desperate to sell and think you’ll be willing to accept a lower

offer to sell your house.

The buyers thought process talked about throughout this article often results in a lower sold price.

When you price your home to leave room for negotiations, it may result in a seller selling their home

for less. While you think you may be protecting yourself with pricing high, chances are it might just hurt

you in the long run. Price your home right and the desire for a buyer to negotiate will be reduced

once they see the home is already fairly priced.

Call us when you are ready to buy or sell. Got questions? We have answers!