Home Selling in 07512>Question Details

Jj, Home Seller in New Jersey

I am thinking of selling my home is it a good idea to under price my home to get multiple offers?

Asked by Jj, New Jersey Wed Sep 3, 2008

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16
Not a good idea. If a buyer presents a contract with you price and does not need a mortgage and can close on the terms in the listing you may have to sell it. You should consult an attorney before you do this.
Web Reference: http://www.erarealtynj.com
0 votes Thank Flag Link Thu Oct 29, 2009
I can tell you from personal experience dont do it I had my realtor convince me to do that and I ended up with one low ball offer as the buyers thought i was desperate after i realized that and we decided to raise the price to what our house was truly worth we realized folks were no longer interested as most realtors can look at the history and see what your originally listed your house for price your house according to what its worth with a little negotiation room once you get an offer and ALWAYS leave extra negotiation ROOM for after the HOME INSPECTION every BUYER finds something to NAG about they want a credit for everything. We finally sold our home THANK GOD.
0 votes Thank Flag Link Tue Sep 16, 2008
This market has been extremely interesting! Working with three different sets of buyers this summer, we saw beautifully presented homes that were just about 6% under current market values. The offers I submitted were outbid every time. There's an Essex County broker (who I won't mention as they're the competition) whose agents have been following this tactic. As a illustrative and educational piece, I ran this office's sales for 3 months running. The sale prices, in most instances, were usually well over asking.

In underpricing your home, you'll be drawing the largest bounty of buyers. Those who are shopping not only at the price range you list at, but also the crowd of buyers who are looking at homes priced comparably or higher. The more buyer attention you draw (and realtor attention btw, as a good agent familiar with the inventory will push your home to their customers as an amazing deal), the more likely one or more parties will make offers.

In this contentious market, I've found banks will accept only very recently run appraisals as values in some towns have been dropping. An appraisal will cost you money and may not be worth anything to you in the long run. Realtors are a much more realistic barometer of home values anyway, because we've seen what has listed and sold throughout time and can more effectively guage "smart pricing."

I'd be happy to email or fax the research I conducted to show you this tactic works more often than not. Of course, the choice remains with you. In any case, good luck to you! Don't forget to combine smart pricing with EXCELLENT PRESENTATION! You want your home to outshine the competition, too.
0 votes Thank Flag Link Thu Sep 4, 2008
The appraised value of a house doesn't mean it will sell for that much. In a tough market like new jersey, houses for the most part are being sold well below the appraised value.
0 votes Thank Flag Link Thu Sep 4, 2008
Pricing a home is a very critical step, it can prolong the sale or short change the seller. Joyce has the right idea if you arent in a rush to sell. If time is of the essance, then i recommend pricing the home 5-10% below market value.
Web Reference: http://www.OurNJhouse.com
0 votes Thank Flag Link Thu Sep 4, 2008
Jj,

Joyce is right on the mark......important to note is that under pricing your property does not insure you will get multiple offers. Hopefully, you will get increased activity and we know that selling is all about VISABILITY.

Good luck,
The "Eckler Team"
0 votes Thank Flag Link Thu Sep 4, 2008
Jj,

If your goal is to get your house sold quickly, then pricing it below market value will hopefully induce multiple offers, which could lead you to getting more than what you wanted in the first place. As someone previously mentioned, it's nice to see a homeowner that thinks this way. A lot of sellers think their house is worth what is was worth 2-3 years ago, and then the house sits on the market for 6 months, doesn't get sold and then they go to their listing agents and say how come my house isn't sold yet? Good luck to you and I hope your pricing strategy gets you more than what you're asking for.
0 votes Thank Flag Link Thu Sep 4, 2008
NO... if you only get 1 offer with no contingincies you would get stuck selling it at a fireslae price. The key is to price it near what you want, low enought to get an offer but not so high no one looks and not so low you have room to negotiate. 1 good offer will beat 5 so so offers all day. price it right the first time. You can get a brokers price oppinion from local brokers or even hire an appraiser to get todays value of your home. Good luck JJ
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Sep 3, 2008
JJ,

Pricing, exposure, location and availability play major parts in selling a home. A know of quite a few homes that were listed under market value and most of them did lead to multiple offers and ultimately a higher selling price. I've seen many houses listed under market value in more desirable towns tend to sell for over list price. I would be happy to prepare for you a customized cma including the all sold homes, and evaluate if any of them sold for over list price (determine whether they were listed under market value initially or just a desirable house thus leading to multiple offers), and compare the days on market, etc. Being a former resident of Little Falls, I am very much familiar with the Little Falls/Totowa market area.

As stated in my opening sentence, location (including town and street) play a big factor also in pricing a home, as well as the availability for the listing to be shown. I have seen some well priced homes on the market expire due to inconvenient showing instructions, no lockbox, etc. Even if a house is well priced, if nobody can get in to show it -- your chances of selling may be reduced.

Let's not forget about marketing.... any listing needs an aggressive marketing plan. Again, I would be happy to discuss with you my Global Marketing Strategy and share with you our Global Marketing System which is designed to position your home in front of MILLIONS of unique monthly visitors to the industry’s leading web platforms. Selling your house for the highest possible selling price in the shortest amount of time is our always our goal.

Good luck.

Please feel free to contact me directly for more information...with no obligation.

Gina Chirico, Sales Associate
Prudential NJ Properties
973-715-1158 cell
973-239-7700 ext 132
GinaChirico@PruNewJersey.com
0 votes Thank Flag Link Wed Sep 3, 2008
Jj: Depends on what you mean by "underprice." Some buyers will ask "what wrong with this product"? no matter what the product, if it's too low. Onthe other hand, pricing slightly below the competition usually insures at least a look from any serious buyer. The only way to do this accurately is to work with a Realtor who has access to the sales and listing figures through their MLS. Offers depend on the market, the area and what the buyer see as something they are WILLING to buy.

Good Luck
0 votes Thank Flag Link Wed Sep 3, 2008
Jj
This is another wonderful question. The typical question is: How much should I overprice my home so I have room to negotiate?

The market is divided into two groups of listings:
Group One sells in 30 days, about 20% of the market. In my MLS listings that sell in the first 30days sell for 100.89% of asking price.
Group Two sells in average Days on Market (DOM) AND LONGER and is about 8u0% of the market. In my market the average market time is about 75 days. Listings that take over 120 DOM to sell go for 93.6% of asking price..and that is AFTER some price reductions.

Calif. Association of REaltors did a survey, and the buyer first sees the home they purchase with a Realtor 90% of the time. So as important as the internet may be, 90% of the time the Realtor has the buyer. So Realtors average about 3-7 buyers in this current market. They are looking for properties for their buyers. When a "good deal" comes on the market, they know it right away.

That is why a well-priced, well-prepared home will actually sell for MORE than market value when it sell in the first 30 days on the market. The truth is that the 20% of homes that do sell quickly are in most cases BETTER homes. In a buyer's market, homes that need cleaning, painting, full of clutter, etc. will not sell. If and when they do sell, they sell at a deep discount.

Good luck. If you'd like a top Realtor to interview, you can contact me via my Trulia profile and I can help you.,
0 votes Thank Flag Link Wed Sep 3, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Underpricing your home does not guarantee multiple offers. Perhaps a better way to encourage offers is to have a bank ordered appraisal done on your home, then market it at that recent appraisal. The biggest fear a seller has is paying too much for a home....and the biggest fear a seller has is getting too little for his/her home. If offers come in a timely manner, often that bank ordered appraisal can be used by the buyer's lender...another bonus to the buyer.
0 votes Thank Flag Link Wed Sep 3, 2008
This is the strategy I use most often. It has been extremely successful. Suggest you have it listed a few days before showings begin, start them on a Thurs or Fri and hold open houses sat and sun. This way there is time to have home on many other sites. Have all marketing pieces ready by the tiime the property begins to show.
0 votes Thank Flag Link Wed Sep 3, 2008
Getting the price right is critical - hats off to you for recognizing it. Pricing under the market is a good strategy - it may lead to multiple offers, it may not, but it will lead to a sale in the shortest amount of time at a price close to if not over list. What we are finding is that homes, when properly priced, are selling between 1-5% of their list price - and yes, there are some multiple offer situations (I'm involved with one right now). Whether the "right price" is reached after several price reductions, or wisely set right out the gate, varies. I am confident that those who priced right from the get go - do better - not worse than those who painfully work through adjustment after adjustment. The less time your home is on the market, the better you will do.

Your next step is to maximize exposure to potential buyers. While exposure will not cure a pricing problem, a well priced home that noone knows about doesn't stand much of a chance either. Price it right and explode onto the market and you should do just fine.

I specialize in Somerset and Middlesex Counties - if I can help, let me know.

Good luck to you!

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Wed Sep 3, 2008
Yes, you can. This can work very well in this market. You get a lot of questions on what is wrong, but I recently had a client that wanted to sell their home in 1 day.

We priced the property "aggressively" and we actually sold it in 1 day. ( a very good offer, all cash and 30 day close)

So yes, it does work.
0 votes Thank Flag Link Wed Sep 3, 2008
Hello Jj,
You are one of the few people that think correctly.
In this market or any the best way to negotiate up is to price it below.
There is also other ways to sell.
Try thru Auction with http://www.sheldongood.com
All the best and let me know if you want me to connect you to these guys
Web Reference: http://www.sheldongood.com
0 votes Thank Flag Link Wed Sep 3, 2008
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