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So, I've decided to list at $325K w/ not as much negotiating room.
I agree with the other replies, whether the neighbors like it or not should not even be an issue.
We actually did the same thing. We undercut the folks down the street by $20,000 and that was after they had dropped their price twice. We certainly didn't want to chase the market down like they had been. They ended up selling for all of $500 more than we did. But our listing was active for 3 weeks. I believe they were on the market for approx. 9 months before they sold.
Pay attention to Lizzie007's comment though. Don't cut your negotiating room too close.
You can't underprice a house. If you price at $325,000 and the house is worth $350,000 you'll have repeat showings and multiples offers quickly, in fact you may even start a bidding war and go well over your list price - even in this market. If you list at $325,000 and get occasional showings and no offers within the first two weeks, then you'll know where the market is.
The only concern I had with the asking price is, 1) Not leaving much room for negotiations, (per the OP) and 2) Sending out a signal that the OP is desperate to sell, meaning even lower offers.
The only concern I had with the asking price is, 1) Not leaving much room for negotiations, (per the OP) and 2) Sending out a signal that the OP is desperate to sell, meaning even lower offers.
Any thought?
Those are legit concerns. But if you were in his shoe, what would you do? List at 350k? Remember, he wants to sell it fast.
I would second what pretty much everyone has said above - think you are smart and doing what needs to be done.
In my area, houses are either overpriced and never moving, or priced attractively and attract multiple offers, there is no inbetween. From what we are seeing, there ARE buyers out there (as always) but they need to see value.
As to the "test the waters" or "leave wiggle room" theories, there is an appraiser in our area who does very in depth analysis of house prices. He finds that houses that start higher actually sell for less than those who start at an aggressive level.
Hope that helps.
I agree that underpricing can be a smart stratgegy, but it does come with an element of risk. Buyers seem to have this mentality of having to offer at least 10-15% under asking, so they can feel they got a "deal" and protect themselves from further price declines. There's always a chance that all your offers will be lowballs and at $325K, a lot of them might come in under $300K, since that is a psychological price point. So you may be in for some prolonged negotiating with this strategy, but it sounds like your home will sell quickly. Always keep your eye on the goal and price-- and negotiate-- accordingly. Works for me. Good luck!
I agree that underpricing can be a smart stratgegy, but it does come with an element of risk. Buyers seem to have this mentality of having to offer at least 10-15% under asking, so they can feel they got a "deal" and protect themselves from further price declines.
Agree. A neighbor of mine recently underlisted at $429. The strategy did work as he had miultiple offers and sold for $440. Strange thing is, I'm listed at $475. My house is on a bigger lot, and it's in much better condition, yet I'm getting offers under $400 (one was 73%). Luckily I'm in no rush to sell, but I'm wondering if I should take the risk and reduce it like my neighbor did.
Funny you should bring this up, because I just dropped my price to be the lowest in the neighborhood. Everyone has been sitting at the same price for a while and I decided to bite the bulllet and drop first. My neighbor (whose house is not for sale) said, "Wow, could you give those of us who are staying a break?" He was smiling, but I knew he was concerned about the value of his own home if mine goes cheap!
Don't worry what the neighbors think. I bet you'll be sold and in your new home quickly! Good Luck!
I agree that underpricing can be a smart stratgegy, but it does come with an element of risk. Buyers seem to have this mentality of having to offer at least 10-15% under asking, so they can feel they got a "deal" and protect themselves from further price declines. There's always a chance that all your offers will be lowballs and at $325K, a lot of them might come in under $300K, since that is a psychological price point. So you may be in for some prolonged negotiating with this strategy, but it sounds like your home will sell quickly. Always keep your eye on the goal and price-- and negotiate-- accordingly. Works for me. Good luck!
There is nothing that says you have to accept any offer on your home, as long as you don't discriminate and violate Fair Housing Laws. If you price correctly and the buyers see value, you will get the correct price (which may be a moving target). Make sure your agent is bring you the sold comparables every 2 weeks, the market is changing that quickly.
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risk taking
