Imagine that you have just finished a rehab project and couldn’t be more excited with how the property turned out. You proceed to look at the recent sales in the area and you feel that your property has exceeded the quality of those respective houses. The only question you have is whether or not to list your property at a higher price. You then decide to list it for slightly more since you feel you have the best property and can justify the increase in price. If you are in a similar scenario, you may find it particularly difficult to sell your property in a timely fashion, if at all. Conversely, a good listing strategy will help you sell your property faster and for more money.
No buyer wants to pay towards the higher end of the market. Even if the upgrades justify the increase on principal, buyers don’t want to set a new benchmark. They will always look for lower comparable sales or current listings to justify their below asking price offer. Knowing this as a seller, you have to give your buyers incentive and motivation to reach your asking price. The best way to do this is not to start your listing higher and flaunt your property as the best on the street, but rather to list below market price and create a demand.
Too many sellers think you can start high and negotiate to a lower price. That worked for years, but in this current market you need to create a bidding war to get top dollar. You can do that by listing at market value and increasing buyer interest. Once the property hits the MLS, savvy realtors will know what a good deal looks like and will quickly alert their buyers. A good strategy is to hold an open house of sorts, where everyone that called to see the property can do so at the same time. This will show other potential buyers just how much interest there is.
After seeing others interested in the property, buyers are more likely to come up with an aggressive offer. If there are multiple offers, you have succeeded in creating a bidding war. Instead of getting below market value, you are now on track to get at least your original desired price and probably more. The alternative is to start your listing too high and let the property sit on the market without any activity. The longer the home is on the market, the less attractive it becomes and the lower the offers will be that come in.
This strategy requires trust in your realtor and the property. If you have a below average property, this may backfire, as buyers will recognize this and demand will not be created. If your property is as quality as you think, buyers and realtors will always move quickly to buy. You have to trust the process and trust your realtor. This may take discipline and a good poker face, but it will all pay off when your buyers are bidding against themselves instead of hoping an offer comes in.
Getting the maximum price for your property does not mean you have to start there. If you start out low and create demand, you will end up getting to your price in the end.