PRICING EXAMPLE
A homeowner decides to place the home on the market and must decide on an asking price. By rough estimate, the home’s market value falls between $690,000 and $700,000. Many homes are on the market in that price range. 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 $710,000. 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 $695,000. Likely, home shoppers will lump the home with like-priced homes, knowing they can buy anytime for that price. • The “underpricing generates interest” approach. Underpricing at $680,000 will motivate buyers and perhaps create a bidding war. But the goal of selling the home for more money is derailed. • The “think like a buyer” approach. A buyer will start their search online. If a buyer is looking up to $700,000 your home may not show up on the search if you have it listed at $710,000. Conversely, if a buyer is looking for a home $700,000 and above you will not show up if you are priced at $695,000. Think about the pricing brackets online and think like the buyer.
50
Powered by FlippingBook