Here is one of the best tips for selling a house in Farragut or Knoxville that I can give you. Price it right! In today’s competitive Knoxville real estate market, where demand is outpacing supply, like in Farragut, parts of Knoxville, and many regions of the country, pricing a house is one of the biggest challenges REALTORS face. Sellers often want to price their home higher than recommended, and many Knoxville real estate agents go along with the idea to keep their clients happy. That being said, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them. I always say, I’d rather you be a little upset with me now because I’m being honest, then really upset with me later when your home hasn’t sold because it was priced too high.
Forget “later.”
Some sellers think, “If the home doesn’t sell for this price, I can always reduce the price later.” This is a big no, no. Why? Research proves, homes that have a listing price reduction sit on the market longer, ultimately selling for less than similar homes.
John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:
“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”
Another factor to consider is, the “I’ll lower the price later” approach can paint a less than positive image in the minds of buyers. Every time a price reduction occurs, buyers often think, “Something must be wrong with that house.” Because of this perception, when a buyer does make an offer, they low-ball the price because they perceive the seller to be “highly motivated.” Pricing it right from the start eliminates these challenges.
Building “negotiation room” into the price. Don’t do it!
Many sellers say that they want to price their home high, in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. This reduced demand will negatively impact the sales price of the home.
Wondering how this could be true? Look at it this way.. when a buyer is looking for a home online (as research says over 93% of buyers do), they put in their desired price range. If you, as a seller are looking to sell your home in Farragut for $400,000, but list it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it!
A better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “chance” to purchase your house. I’m not just talking hypothetically, this is happening often with the homes I’m selling in Farragut and Knoxville right now.
Think of it like this.. if you only receive one offer, you are set up in a “seller vs. buyer” situation. If, however, you have multiple offers, you have two or more buyers fighting to please you (“buyer vs. buyer). Which do you think will result in a better selling situation?
The Price is Right
Great pricing comes down to truly understanding the local real estate trends, down to the neighborhood level. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home in Farragut or Knoxville. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.
Interested in finding out the truth about what your Knoxville or Farragut home could sell for? CLICK HERE! Want to discuss the local or national real estate market? Have any real estate questions at all that you’d like answered? Contact me, Troy Stavros with Gables & Gates, REALTORS at 865-999-0925 and I’d love to help. I’m here to serve you!
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