Buyers look for the right deal, but what they are willing to pay or the bank is willing to finance has limits. Strategic pricing is your greatest tool when selling your home. PRICING EXAMPLE A homeowner decides to place his home on the market and must decide on an asking price. By rough estimate, the home’s market value falls between $290,000 and $300,000. Many such homes are on the market. These are some pricing considerations and approaches to finding that “right price”: • The “leave room for negotiation” approach. In this approach, the market value is “stretched,” say to $305,000. The price will not entice a buyer, but may make comparable homes more desirable. The home will most likely not sell quickly or at that price. • The “price it according to worth” approach. This approach sees the price set right between the market value benchmarks, at $295,000. Likely, home shoppers will lump the home with like-priced homes, knowing they can buy anytime for $295,000. • The “underpricing generates interest” approach. Underpricing at $280,000 will motivate buyers and perhaps create a bidding war. I have seen homes sell for much more than they ordinarily would and for much more money when doing this approach.
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