A strong real estate market emboldens potential sellers. Home owners start thinking “Everything is selling fast and above asking, so selling our home is a sure thing.” Death and taxes are sure things. Selling your home for the best possible price and the most favorable terms is pretty far from a sure thing, but there are well tested strategies.
Here’s a strategy I use based on my experience in the current market. People search home listings online. When searching, they enter price parameters. That means a buyer searching homes up to 650k DOES NOT SEE a listing that comes on market at 659k. That’s a difference of roughly 1.5% which, granted, in hot markets is not negotiable. But the market always cools, and some negotiation will return and in some cases already has returned.
Now lets shift to seller perspective. If you are selling your home and 50 buyers are mulling through your open house, they perceive a sense of urgency. Each one of them thinks 49 other people might take the house they want. This drives the active buyers to make higher value, lower contingency, more favorable offers. If the same buyer attends an open house with 5 other buyers, their sense of urgency is dramatically less. Their offer might include more contingencies, focus more on post-inspection re-negotiation and be submitted with a greater confidence that the seller will bend to their interests rather than vice-versa.
Lets combine the last 2 paragraphs’ content. If more buyers are interested in a property, it improves the value and terms of offers by creating perceived urgency. At the same time, buyers search by price and won’t see listings above their search parameters. Conclusion? If you list a bit BELOW your reasonable market value (don’t Zestimize yourself into failure, consult a reputable expert real estate agent) you will draw more buyers. More buyers drives up offers. If you list above your reasonable market value because the market is strong and you think selling is a “sure thing”, less buyers will see the listing meaning less buyers will attend the property meaning less urgency will drive their interest meaning lower or weaker offers will result.
It ain’t rocket science. Cawl me, we’ll tawk.