Price Below Market Value

Pricing your home below fair market value does not necessarily mean that it will sell below fair market value. When you price your home lower, you can often create a frenzy among buyers and create competition, driving up the price. Have you ever watched an auction? It is like that, where everyone wants to acquire the home for a bargain, but the demand and attention it gets from other buyers increases the resulting sale price. This pricing strategy only works well in certain markets. Depending on the nature of your market, your real estate agent can help you determine if this approach is right for you. Traditionally, this strategy works the best in moderate to high inventory markets. In a market with low inventory when most listings are getting multiple offers, this approach might not be ideal. So if pricing your home below market value is right for you, here are a few pros and cons to understand first: Pros • Creates a frenzy and attracts more buyers and multiple offers • Quick on market time frame • Final sale likely to be over asking price Cons • Buyers bidding on the lower number may not be qualified or capable of getting financing for the actual/intended sale price • Not enough demand could result in a sale lower than market value might not attract the right buyer. Price Above Market Value Say we push the envelope on price and list your home above market value, what will happen? The pros are that you may just find that perfect buyer and set a new value for your home and the neighborhood. However, this is not a likely scenario. What is more likely is a situation that would fall under the "cons" category of pricing your home above market value. Often, this strategy will have you headed towards too much time on the market and/or an expired listing. To sell your home, you need to attract the attention o

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