Any house is only worth what comparable homes have recently sold for in the neighborhood. If the seller determined the sale price based on the list price, everyone would list their homes at $50 million. This ridiculous example illustrates that there is no relationship between listing at a higher price and selling at a higher price.
The seller doesn’t choose how much the buyer pays for the house. The seller chooses how long he or she will wait until the home sells at fair market value. In a declining market, this could mean several months of price reductions until the home finally gets ahead of the market or no sale at all. Successful sellers understand the relationship between price and time.
So what is the best way to price a home without leaving money on the table? Home buyers and their real estate agents use the internet to search for homes. This forces them into specific categories, usually in $50,000-$100,000 increments. The photo below is a screen shot from www.buyparkcityhomes.com.
Let’s say a home is worth somewhere between $600,000 and $650,000. I would recommend pricing that home at $649,000. The reason is that buyers in this price point are going to search from $600,000 to $650,000. If we price the home at $629,000, we are not going to pick up any additional buyers and we may possibly leave money on the table. What if there were no showings at the $649,000 price point? The logical price reduction would be $599,000.
To successfully sell a home, you have to think like a buyer.