You may want to weigh your options.
Sell at $475,000 with 6% commission and you will net $446,500.
Start the bidding at $475,000 and what will you net at $475,000? $480,000? $490,000?
If your home's value is $540,000...ask $525,000 and offer a $10,000 incentive toward closing costs, or discount points to Buydown the Buyer's interest rate/payment. You can advertise 4.0% 30 year fixed for Qualified Buyers or you can offer a 2.5% start rate for Qualified Buyers.(You do NOT hold the mortgage.)
If you do not have reasonable offers within 3 weeks...drop your price to $499,900 and still offer $10,000 Buyer incentive. You may have a few people interested ...that would create a competitive situation...so that you can take the $10,000 off the table and put it back into your pocket.
Please let us know what you decide.
In response to the previous poster, I will say he must work in Fairfax regularly and not in Loudoun. Western Loudoun is a different animal than Eastern Loudoun or Fairfax. Plus, for the last 45 days or so our market has been slowing dramatically. I don't know what to make of it, as the summertime can be fickle. We had a really good spring... but that was then, this is now. Where is the market going? We've been expecting a 'double dip recession'...maybe this is it. What if it is? If prices drop further, maybe a year from now, $475K will look like a good number to you.
I don't know who your listing agent is, but he or she is probably just recommending that you get ahead of the curve. I know you dont want to leave any money on the table, but here is the reality - if it is underpriced, there will be a bidding war and you're selling price will be higher than your listing price. YES, it does happen. But, if comparable sales are slow, then you need to be a 'deal' to sell.
First, why did you have your home appraised? If it was to determine the value, then why is your listing agent telling you to price it at $475,000? Why not $540,000, plus or minus a bit?
How much do you owe on the property? That won't affect its value at all, but it can affect the decisionmaking process on whether and how you sell.
Why an auction? They do sometimes work. Sometimes they don't. Usually they don't bring in any more than you'd get by selling conventionally. And that brings us back to how much it's worth--$540,000, $475,000, or something else.
Just for your information, data from the Northern Virginia Association of Realtors (NVAR) for Loudoun County homes shows the market strengthening greatly.
From May 2009 to May 2010, the average net price on Loudoun County single-family attached homes rose 24%--from $263,180 to $325,235. During the same period, Days on Market dropped from 60 to 23.
For the same period for single-family detached, the average net price rose 14%--from $463,085 to $526,068. During the same period, Days on Market dropped from 95 to 57.
Now, obviously, you can't figure out your home's price from these data. But the point is that the market's been strenthening, with prices going up and days on market dropping substantially. So: Ask your agent why she's recommending the price she is. And ask to see the CMA--if you haven't already--to find out the basis for her recommendation.
Hope that helps.
I don't disagree with Vicky. But I did want to cite the NVAR statistics just to give you a general sense of what NVAR's been finding. And those are trends over the course of a year, not reflective of the past 30-45 days--as I indicated in my answer.
Still, that's a big discrepancy between the appraisal and the suggested pricing. And that's why, as I'd earlier suggested, you really need to understand the rationale behind that suggestion. Not that it's wrong--though it might be--but you need to know.
Hope that helps.
Some savvy home sellers conduct an auction with a Certified Licensed Auction company to create a rush of buyers and if the house is in great condition, clean, and MARKETED WELL can bring up the bidding price if there are buyers there to get the price where you want it. BUT! This can also hurt your chances in selling your home.
The question is why the listing price of $475K? Is that what the comps came in at? If so, you might want to listen to your agent if the data supports the listing price. I would ask to see the comps from the appraisal to make sure they are realistic and compare with your agents data and take it from there.