For seller clients, it’s important to understand the purpose of the Comparative Market Analysis (CMA) price range and it’s relationship to pricing. Depending on the property type and price range of your home, the strategy of pricing lower than market value to attract bidding wars may or may not work. The market is in transition right now. We are at a point where some areas are no longer seller’s market but not necessarily buyer’s market, more of a neutral situation.
This year, I have seen some seller’s agents failed to adapt to this market transition and still price the home too low. And when they didn’t get the price they wanted because buyers just came in at the low list price, they had trouble negotiating with the buyers to raise the price because they already priced the home too low. And so the property sat on the market for a long time and the sellers in those situation often had trouble getting the price they wanted. The longer the property sits on the market, the more likely the buyers will come in and negotiate hard, and the more leverage they have. That’s why pricing strategy is so important. It’s critical to analyze the nuances of what’s going on in the market and try to reach as many buyers as possible with your pricing strategy. Don’t get carried away with bidding war strategies because I’ve seen many situations where these strategies actually backfire when not done properly!
I often try to find out how much a home sells for before the data even becomes publicly available. I would try to find out the sale price of many pending homes, before I even advise my seller clients how to price their home. It takes 1-2 months for a home to close and for the sale data to become publicly available. So relying only on public data of sold properties is often not aggressive enough. I try to find out information that others don’t have access to. In this competitive day and age, information is key to success. If you are in an area where the market is transitioning to a buyer’s market, you need to work with an agent who is extremely aggressive and on top of things. I try to research all the competing properties and observe their pricing activities before I put my seller clients’ home on the market. There is no other ways to get the best price than watching the market closely. There are so many buyers and pricing is a important tool for sellers to get the best buyers.