This may seem counter intuitive. Let us look at this concept for a moment. Many homeowners think that pricing their home OVER market value will leave them room to negotiate. Actually, this dramatically lessens the demand for the home (see chart below)
Instead of the seller trying to “win” the negotiation with one buyer, they should price it so that demand for the home is maximized. Doing this, the seller will not be fighting with a buyer over the price; instead, they will have multiple buyers fighting with each other over the house.
Realtor.com gives this advice:
“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they are getting a deal, they are likely to bud up a property that’s slightly underpriced, especially in areas with low inventory,”
This, too, may seem counter intuitive. The seller may think they would make more money if they did not pay a commission. With this said, studies have shown that homes typically sell for more money when handled by a real estate professional.
(See 5 reasons to use a professional).
A new study by Collateral Analytics reveals FSBO’s do not actually save any money and in some cases may be costing themselves more, by not listing with an agent.
In the study, they analyzed homes in a variety of markets in 2016 and the first half of 2017. The data showed:
“FSBOS tend to sell for lower prices than comparable home sales, and many cases below the average differential represented by the commission rate.”
The results of the study showed that the differential in selling prices for FSBOS when compared to the MLS sales of similar properties is about 5.5%. Sales in 2017 suggest the average price near 6% lower for FSBO sales of similar properties.
Price your house at or slightly below the current market value and hire a professional. This will guarantee that you maximize the price you get for your house.