The average listing price for a home in the United States rose to $374,900 in June 2021, up 32% from March 2020! But mortgage rates are up over 4% for the first time since 2019, and that could cause some cooling for the property market.
Now is the best time to cement your pricing strategy so that you can support your sellers as they prepare to list their properties. Which strategy do you lean towards?
Below market value:
If you’re in a desirable area, pricing a home below market value can make the home look like a bargain. That bargain can create buzz and even a bidding war that ends with a sale above the asking price.
Your low asking price may not attract the right buyer, and that might result in a bidder not being able to get financing for a higher offer in the case of a bidding war. Or, if the low price doesn’t create the buzz you hoped for, a buyer may have to accept a below-market offer.
Above market value:
Record low inventory and buyer demand over the past few years has caused homes to sell for prices that make many of us weak in the knees. Pricing a home above market value now may net the perfect buyer who helps set the value for the home and the neighborhood. That’s the dream scenario.
We’ve all seen the homes with a fantastical asking price hit the MLS. And they sit. And they sit. And they sit. And then they either expire or end up finally selling after some serious price-slashing, sometimes for even less than market value. Price reductions often put a bad taste in the mouths of sellers, and they fear that there may be other issues with the home.
Fair market value:
At fair market value, you attract other agents — there's no concern about why a listing may be under- or overpriced. A house at market value will also have an easier time at appraisal than an overpriced home. As for money left on the table, a home priced fairly can still attract a multiple-buyer situation because of the factors mentioned.
Agents...are you sharing these insights with your buyers in your CMAs? It’s easier than you think. Cloud CMA provides optional insights like the info above that help you ensure that you choose the best comps and educate your buyers in the CMA process. Finding the best price for a home can be a difficult decision for your sellers, and we’re here with the tools to help you be the best coach through the process.