When discussing fair market value and pricing strategy with sellers, the phrase that makes me want to jump out of my skin is, “I’m not going to give away my house.”
I wish I had a nickel for every time I heard a seller make this statement – I’d be filthy rich. Let’s face it, folks. Realtors are not asking sellers to give away their homes, or give away profits that could be realized. After all, the more money we can get a seller for his home, the more money we earn.
However, when determining a price for a house we must consider its fair market value - the price that a buyer, willing but not compelled to buy, and a seller, willing but not compelled to sell, would agree on. This number is based on similar type properties in close proximity to the subject home that have recently sold or are under contract. It also takes into account the properties that are currently active on the market – your competition.
A seller can put any price he wants on his house, but ultimately it is only worth what a buyer is willing to pay for it. Buyers are savvy. They have more resources at their fingertips today than ever before. With only a few clicks of a mouse, they can easily figure out if a house is appropriately priced or if it is priced too high.
This brings me to the second phrase that makes my blood boil. “So what if I price my house high. Won’t a buyer make me an offer at the price he thinks it’s worth?” The answer to this question is, “In most cases, no.”
Writing an offer to purchase a home takes a lot of time, research, and thought. Buyers have learned the pitfalls of insulting sellers with offers far below the list price. They’ll either wait for the seller to reduce the price to fair market value before making an offer, or they’ll find a home that is appropriately priced and make an offer on that house instead.
Want to sell your house for the most amount of money that the market will bear? Then price it right from the start. The most motivated buyers will want to see it when it’s fresh on the market. Typically, the longer you wait to price it right, the less you will get for your house.
Want to know what fair market value is for your house? Use our FREE tool to search recent home sales in your neighborhood. Or sign up for a FREE Listing Book account and keep track of all sales in your community just like realtors do!
Wishing you sunshine everyday and the home of your dreams,
Jeri
