Monday, September 23, 2019 / by Gianfranco
You should price your home higher so you leave some room to negotiate. That’s what your uncle or next door neighbour probably told you. That is the century old myth or is it?
We're on seller's secret number eight today, which is very exciting.
We're going to talk about, when setting your price, make sure you leave some room for negotiating.
Well, that can be a misconception. It's got to be ... there's a myth, like whenever you want to sell your house, just price it a little bit higher, so this way there's room to negotiate. You've got to understand, this does not mean for every case, if your house, for example is a million dollars, you list it as 1.2 million and leave 200,000. That's not what we're saying here.
What we're saying is it's got to be studied. You've got to study the trends. You've got to study the market reports. You've got to study the sales, and based on that, have a custom-tailored marketing strategy for that house. It's not a one-size fits all. A lot of agents use that strategy.
This goes back to working with the right team that has worked, that has more knowledge and more combined years of experience, and also working with the right softwares, so you can get the correct statistics that will help you understand in certain areas, what kind of ratios are selling, sell to ask ratio, right?
We invest in softwares that give us market trends and reports, in a user-friendly way, where we can sit there and study it and based on that, decide. Like, for a property, it's probably better to list it, three percent higher ? than what the market value is to get what we're looking for. Or maybe in another situation, you may list it a little bit lower, so you can hold offers to create an auction effect and create a bidding war.
But, the sellers need to understand that it's not the same strategy will not work for every house, especially in today's market. In today's market, it's more important than ever for you to have a proper advice, proper strategy, and make sure their pricing your home the right way is one of the most important things.
It's a formula. It's a strategic formula, and it's really, really, really crucial to work with an agent that understands this formula.
You cannot be testing what the best price to list it at on the MLS. For example, what we do with our clients is we have a pre-marketing, pre-MLS stage, where before we put it on MLS, we market the home to our database of 30,000 buyers, and we market the house at different prices that we're thinking within a $50,000 range, and based on the response we get from our database, we realize what the best price would be to put on MLS.
So, we're not actually testing and taking chance with your house. We're doing it with our database first. Once we do that research pre-marketing, a lot of times we just end up selling it to one of our buyers, but in the event that we don't, at least we know what the best price is, where it would create the highest demand.
What we mean when we say pre-marketing is, trying to sell it to somebody from our own database without listing the property on the open market.
A lot of times this happens. If one of our buyers are looking for a home, which in a lot of cases, we have 30,000 buyers, and when we break it down in each area community, probably like 100, 150 buyers looking for a home like yours, and a lot of times if they give you a good offer, you're more likely to take it and avoid going through the process. Even though with us, it takes about seven, eight days on average to sell our listings, you still have to prepare your home for photography, for staging and for people to come through it. Well, what if somebody just came and gave you an offer today and you never have to go through all that?
So, there's actually two benefits here. The first benefit is, you're not kind of playing around with the price and testing it on the open market. That can really affect the outcomes of your property. And number two is, you may just sell the property to somebody before having to list it on the market, and having showings every day and doing that whole thing. So, there's two benefits in doing that.
Either we sell it or we come out with great intelligence that we're going to use, to use as our pricing strategy.
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