What happens when you price a home right in a hot market? Well in one recent case, the home seller got ABOVE asking price — within five days after listing it!
It helps that the home was in mint condition, located in a beautiful and desirable neighborhood in Painted Post, New York, area, and that Corning Incorporated has a constant flux of professionals moving in and out of the area.
The Market is Hot
It also helped that the housing market is hot right now, that inventory is low and good homes are snatched up quickly. At the time of this writing, the Summer of 2017, it’s definitely a seller’s market now, especially for homes like this in the $150-250k price range.
Last week, I was asked by a fellow agent at my market center — Keller Williams Realty, Southern Tier and Finger Lakes — to help cover for him and his team while they were out of the country for a week. This beautiful home had a lot going for it.
Three Prime Reasons:
- Price and
It was located on a nice street in a desirable neighborhood, and it was in outstanding condition. The homeowners did a lot of upgrades, such as a new roof, radon mitigation system, new bathrooms, kitchen upgrades, LED and upscale lighting fixtures, fresh paint in designer colors and so much more. They also kept records of all their upgrades.
The price was set after careful market analysis, and as a result, as soon as it hit the market, the buyers and their agent swarmed to see it. I was the lucky agent to got to coordinate the showing requests with the sellers on behalf of the many buyers’ agents who requested showings.
Bidding War Took Offers Above Asking Price
The interest was intense, the house was tastefully and beautifully staged, and the result was that it sold above asking price in a bidding war. I wont’ give specifics, but let’s just say the buyers were very pleased that it happened quickly and that the competition worked to their favor.
Imagine now how disappointed sellers are when their house is priced too high to begin with. Here’s what typically happens. The pool of potential buyers are interested at first, and come through the house. They decide, for whatever reason, that it’s priced too high, and move on. That pool of buyers and their opinions of value determine the market. Once the sellers agree a house is priced too high and agree to a price reduction, that pool of buyers has already moved on.
To “chase after the buyers” with a price reduction puts the sellers at a disadvantage, and typically the price they end up selling their home for will be even less than the reduced price.
Overpricing a home, especially when the sellers need to sell, puts the sellers at somewhat of a disadvantage. It may be wise to start with a price slightly on the high side, but then have a series of planned price reductions within a few weeks after market feedback starts rolling in. Be sure to hire a good real estate agent to help you navigate these complexities.