We meet with sellers all the time and make estimates on price. We really do our best to provide guidance on what a house is worth. It is a fascinating art.
But what we try to stress over and over is that pricing right is not about finding the estimate and trying to get 5% more, to provide wiggle room. It’s a natural reaction for a seller. If we ask 5% more, we can always come down. If we price low, we leave money on the table. While this may make sense, it is not accurate in reality.
I have a buyer client who is currently attempting to buy a home. This home is priced right. I would certainly not say I think it is priced too low. I don’t think it is priced too high. What I will say is that it is realistic. We made an offer, a very good offer I felt… but guess what… so did someone else. End Result, we just sent a second offer that upped our initial one by 4.5%… Meaning, the seller is going to land up selling their house for MORE than asking, and in less than a week on the market.
Isn’t this what sellers want? If the seller had asked 5% more than they did, I don’t know that my clients would have fallen in love. They fell in love at the asking price… they were willing to pay more, but they fell in love at asking. If the seller had asked more, and my client’s focus had been at the higher number, there would have been a higher comparison. Perhaps there would have not been an offer, or only one offer. No one to push the other up.
Houses priced fairly are moving very, very quickly in the city. Properties that are priced high, are getting very little attention. Why negotiate with someone who is being unrealistic, when you have options with fair sellers?
On the buyer side… be prepared for a battle. Be prepared to offer quickly and a fair number. Gone are the days of you being the only buyer on a property. Gone are the days of stealing a home. This doesn’t mean you need to offer 5% over asking everything, but it does mean that if you think you can slow play an offer and hope to dance to the middle ground, someone else will be willing to do better. If you really want a house, don’t risk dilly dallying. It’s not always worth walking away.