As I was going through my emails, I saw a flyer from a real estate agent advertising a home for sale for $1,999,000. Looking at it, I couldn’t help but think about how both home sellers and some realtors continue to price homes for sale inappropriately.
Home pricing is strategic in nature and takes into account many different variables. An opinion of home worth differs from buyer to buyer and even from appraiser to appraiser. Ultimately, it’s just an opinion of someone and the actual price is set by the agreement of the buyer and the seller.
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However when a home is put on the market, the asking price should be set to attract as many home buyers as possible. So… let’s go back to the $1,999,000 price that I referred to at the beginning of this post. If a seller and his or her agent believes that the house is worth about $2,000,000, why would they eliminate all the buyers looking for homes at $2,000,000 or above?
For this to make sense, let’s examine how home buyers search for homes. Home buyers search in increments of $50,000 to $100,000. The higher the sales price, the higher the increment amount is. Buyers looking for a $2,000,000 estate will usually search for their new home by either entering $2,000,000 and under in the home search website or MLS and others will search for homes by entering $2,000,000+. So… what happens to the buyer doing a $2,000,000 + home search? Those buyers will most likely not see the property priced at $1,999,000. The question begs itself, why would you then price a $2,000,000 luxury estate at $1,999,000 purchase price?
That is not a good pricing strategy.
Irina Netchaev is the CEO and managing broker of Pasadena Views Real Estate Team.
For more advice on home selling, give Irina a call at 626-629-8439 to discuss the best strategy and marketing plan to get you the highest possible selling price. Or, just complete the form below and we will contact you.