House Pricing StrategiesJan 27, 2022
Pricing a house can be difficult because too often agents feel pressured to list the house at a price the sellers want. Yet, the best agent for the seller is an agent who tells the seller what the house will actually sell at. Over the last 500 houses I have sold, my listing price has been within 2% of the sales price 98% of the time.
AGGRESSIVE, PASSIVE, AND NON-COMPETITIVE
I like to use three prices when pricing a house; a low, medium, and a high price that I call aggressive, passive, and non-competitive.
I believe if the house is listed with an aggressive price, the house will get multiple offers and sell the first weekend. The aggressive number is usually below or right at the current comps.
Next is the passive price. I like to set the passive price 3-5% above the current comps, this is usually the top end of the range for the neighborhood.
The non-competitive price is the highest price. When giving sellers this price I always preface it by letting them know that we can list the house at this price, but there will not be as much traffic through the house and even though the house may sell at this price, I don’t think it will.
NEVER USE PRICE-PER-SQUARE-FOOT
My pricing strategy never includes price-per-square-foot, because I think neighborhoods sell in a range. I think price-per-square-foot is a derivative value that is wrong 30% of the time. Agents who only use price-per-square-foot to determine the listing price often lack experience and knowledge.
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