Pricing a home right is the most important thing a seller can do when they sell their house. It is also important to make the home look as nice as possible and make sure the home is in the MLS, but pricing will determine if the seller gets the most money they can. Some sellers feel they can lower the price if it does not sell, and still get as much as they would by listing the home at the correct price to begin with. However, the longer a home sits on the market, the more stigmatized it becomes and the less buyers that want it.
How do MLS hot sheets work and why are they important?
Real estate agents use MLS hot sheets to find new listings, listing status changes, and price changes. MLS stands for the multiple listing service and is what real estate agents use to list homes for sale and find homes for sale. Real estate agents can also set up searches for their clients that show new listings, price changes, and homes that come back on the market. It is vitally important that home sellers have their homes listed in the MLS in order to reach as many buyers as possible.
The MLS is the primary way buyers find listings with the help of their agents. Yes, Zillow and other sites show house listings, but those sites can be delayed days and show inaccurate information. Many houses on Zillow are already under contract or have been on the market for days before a buyer will see them. Not every house that is for sale in the MLS is for sale on Zillow. Some real estate offices and agents choose not to list their homes on Zillow.
Why will some buyers never see home listings that are priced too high?
When buyers are looking for a house, they have certain price ranges they look in. They also expect houses in certain neighborhoods to be in a particular price range. If they are looking for a home in the $175,000 to $200,000 price range, the buyer’s real estate agent may send them listings from $165,000 to $210,000. Most agents and buyers know they may be able to negotiate the higher priced listings down to the price point they want. Most good agents will use this strategy, but some will simply search for homes from $175,000 to $200,000. When a buyer prices their home at $220,000 even though it is really worth $200,000, many buyers will never see the listing because it is out of the price range their agent is searching for.
Why can’t sellers lower their price and get the same amount of money when they list too high?
Sellers who list high figure they can lower the price if they don’t get any interested buyers. This strategy will cause the sellers to make less money in most cases. Many buyers are waiting for new listings to come on the market. The first three weeks are the best time to sell a home if it is priced right. In a hot market, the first week is the best time to sell because many buyers are waiting for new listings to pop up. The buyers are waiting for houses to come on the market close to the price they are willing to pay. If they see a home come up for sale that looks to be priced too high, they may never bother to look at it. As I said before, many buyers will not even see the listing as well.
If a home does not sell in the first month, the seller can lower the price. The problem with homes that sit on the market is buyers wonder what is wrong with it. Every other home has been selling quickly and going under contract, so if this home is sitting on the market with no offers, there must be a problem. The buyers may not see the price has been changed, and they will just assume something is wrong because the house has been on the market for 45 days, while other houses are selling in 15 days. Many buyers will not even look at the house, assuming there is a major problem. The longer a home is on the market, the less buyers will want to see it, and the less money a seller will get.
Why does listing at the right price bring more money?
If a seller lists their home for what it is worth at the very beginning (or just slightly higher), they will get more money. Buyers will see the home come up in the price range they expect and go see it right away. All those buyers waiting for a house to come on the market that is perfect for them will rush to see houses that are priced where they expect them to be priced. You may even end up with multiple offers that drive the price up higher.
Some sellers price a home right and it goes under contract in a couple of days and think: “we priced it too low!” However, many times a house is priced right and goes under contract in a day. Just because it sells right away, does not mean it was priced too low. It may mean the right buyer was waiting to jump on that house as soon as it was listed. If the seller had overpriced the home, that buyer may have never seen it and the house could still be on the market 60 days later.
Pricing a home right is one of the most important things a seller can do. Usually it takes a good real estate agent to get the price right. Even appraisals do not give accurate values and it is tough to come up with a good value from Zillow.