Should You Price Your Home High in This Market?

Los Angeles and South Bay Real Estate Video Blog with Lenny LaRocca

Many buyers think they can get away with overpricing in this market. It’s not a wise move, for a few reasons.

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Is leaving room for negotiation in a home’s list price a worthwhile tactic for home sellers to utilize? We’re in late spring now, and the activity in our real estate market is sky-high. Jobs and wages are on the rise, buyers have a sense of urgency to lock in rates now before they go up, and there simply aren’t enough homes listed for sale to keep up with demand. As a result, bidding wars have become commonplace and home sale prices keep climbing. A common sentiment sellers have is, “Why don’t I just price my home high and leave room for negotiation later if this is such a good market?” The big reason this strategy doesn’t work is because of all the knowledgeable buyers in our market. When you overprice your home, they will know it and move on to the next one. It comes down to pricing the property to sell. Buyers are looking at multiple properties, and they will make an offer on the best value.

It’s best to price your home at market value.

Let’s say you’re driving down a road and need to get gas. There are two stations conveniently located right next to each other. The difference is that one station has gas on sale for $2.50, while the other has gas for $3.00. You will obviously go to the station that has gas for $2.50 without thinking about it, and that’s kind of what happens when you overprice your home. The home that is a better value will get the most attention. It has also been statistically proven that a home gets its most attention from buyers in its first 21 days on the market. The interest nosedives as sellers make price reductions. The buying community will start to think there is something wrong with the property if it doesn’t sell within that time frame. We believe it’s always best to price your home at market value so we can guarantee it will get a ton of activity right out of the gate so multiple buyers can come in and drive the price up. If you have any questions for us or any suggestions for future topics to cover, give me a call or send me an email. I would love to hear from you soon.