Some (many) sellers price high, in the hopes to leave some wiggle room for negotiations. Other sellers utilize â€œunderpricing as a market strategy.â€ I strongly support the latter, so long as there are active buyers in the market to compete and it is a conforming property. I do not recommend underpricing as a strategy for highly unique properties.
When there enough active buyers in a markeplace, underpricing will facilitate mulitple offers and allow the forces of supply and demand to achieve the highest and best price for the seller. While this marketing method can be highly effective, most sellers are reluctant to engage it. Most sellers fear they have left money on the table, and prefer to â€œtry itâ€ at a higher price, and adjust if necessary. Some sellers are still adjusting 300 days later.
There is nothing wrong with paying over list price. There is also nothing wrong with making an offer substantially lower than list, if the market and situation support the low offer. Base offers on market forces, not ask price.
All the best,
Deborah Madey - Broker
Peninsula Realty Group - New Jersey
I like to compare sale of real estate to ebay. If you think about it, when something is priced below its value on ebay you will have many bidders trying to get it realizing that the value is there and at the end the product will get higher price than the starting bid. However, when a product on ebay is overpriced most people will not have an interest being they don't see the value in paying that price for it, since they can get it cheaper elsewehere.
Same basic principle applies to selling real estate. It's a bit trickier and more nerve wracking for a seller to place the home on the market below the marke value price but it will draw tremendous attention from potential buyers making it the "hot property" on the market and will draw mutilple offer that probably result in higher price.
Another example could be a forclosure property that is put on the market by the bank. If the value is greater than the asking price and it's in good condition and in a great location, the same as ebay scenerio will happen and there will be a "bidding war" and there is a chance the purchase price will be greater than the asking price.
Every property is different and you must check the comparable homes in the area to evaluate comperable homes to determine the market value. Hopefully you have a great realtor who can help you in the process.
50 E. Mt. Pleasant Ave.
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The bottom line is that a house is worth what the market will bear. So, a house that is priced below market value will probably sell for higher than the list.
It is not uncommon for this to happen.
Gloria @ Coldwell Banker
Two main reasons are the following:
1. The buyer is competing with other offers and has obtained knowledge that the other offers fall around the listing/asking price.
2. The seller has priced the home well below market value, hoping to stimulate multiple offers. The buyer realizes this and wants to go into contract before other offers are presented to the seller by offering more than the asking price of the property.
If financing, the bank will do an appraisal that will varify the accuracy of the home's value. If the home does not appraise for the appraised value it is unlikely that the bank will provide financing.
Chris Capps, Realtor
Residential Real Estate Specialist
office 804.740.1644 ext. 103
â€œIt's Time to Expect More From Your RealtorÂ®â€
Licensed in Virginia, with contacts across the country
Century 21 Elite Realty, LLC
337 Changebridge Rd
Pine Brook NJ 07058
973.244.7980 Ext 215
Most probably you have a savvy buyer that knows the market, saw a great deal and jumped on it.
I always tell my clients to slam dunk a deal when they can. Due diligence is the key to every transaction.
Is the house worth more then the list price? is it a short sale? is it a good deal?
Do your research and the answer will reveal itself to you.
Because really, really, really wants the property.
Because needs a place to live soon and do not want to rent.
Because it is an action.
Because there is a feling that the property is worth more than listing price.