Alternative Approaches To Creating A Listing Price
- Optimistic pricing: This is different from what is often referred to as an over – priced scenario! It is hopeful and seeking the highest range of possibilities. It is generally only for a homeowner who is not under any sort of time or financial pressure, and may or may not work. However, if you follow this approach, and in the first couple of weeks see little action, you must prepare for a price adjustment. At the same time, it’s important to realize, the potential ramification of this approach is often, opportunity – based, because, statistically, the best offers usually come in the first few weeks!
- Bidding – war pricing: Pricing a property at the lowest end of the spectrum/ price range, The reasoning behind this approach is to attract many more potential buyers, and hopefully, some sort of bidding – war. Of course, if the approach does not achieve that objective, you may create an undervalued environment!
- Higher end of the price – range: The best way to price a house is to begin by understanding where the property sits, based on the rest of the market, and homes which might be comparable. Using a CMA, a specific range of prices might be recommended, and some like to price at the higher end. The success of this approach often depends on the market, the trends, and the competition!
- Lower end of range: If there’s a lot of competition, and it is important to have a transaction occur quickly, this approach sometimes might appeal.
- Middle of the range: My personal favorite approach is to look at the middle of the range and then create a listing price, just below the median. For example, if the comparisons indicate a recommended range of $750,000 to $800,000, this approach might indicate pricing at approximately $769,000 to $779,000. This approach is best, in markets which may be somewhat less predictable.
Regardless of the approach, the homeowner and agent, must be on the same page! Use the pricing approach, best suited for you, and you feel comfortable with! Remember, however, listing and selling prices, may be far different animals!