If you've been thinking about selling your house in the Greater Des Moines area, you probably wondered - how should I price it???
There are several strategies for pricing your home for sale which we cover in the video below.
We talk about market value, the pitfalls of over pricing your house, how to give a "crazy" vibe to all buyers, and how to get multiple offers on your house.
If you're curious what your home is worth you can check that out at http://515homevalue.com.
In case you haven't heard 2021 real estate is starting off pretty hot in the greater Des Moines area. A lot of questions that I'm getting from people who are thinking about selling their home are related to how do we set the price. They want to know:
- How can I get so many offers on my house?
- How can we get a bidding war?
- What if nobody offers?
And in this video, I'm going to answer all of those questions. I have been thinking about this a lot, which gave me time to create a PowerPoint presentation. So this lovely triangle is our pricing triangle:
And on the left-hand side, you're going to see the asking price. And on the right hand side is going to be the percent of potential buyers who will look at the property.
So right there in the middle is going to be market value. And you can imagine, like when you have a real estate agent over, they're going to tell you what your house is worth based on the research that they've done, the facts and information available to them, and we call that market value. And that is a whole other video on exactly how we get to the price, but we can cover that some other time.
So right now we're just going to agree that the amount that your realtor says is market value is correct and it's market value. So if you price your house in the market value range, you should have 60% of potential buyers looking at your property. That's pretty good.
Now, if you price your house, 10% above market value, then your pool of buyers is cut in half and 30% of people will look at your property.
I often have sellers say, well, let's list the house for $10,000 more than market value. That way we have room for negotiation. And I wish it worked that way. In some markets it does work that way. I believe in Minnesota, it might be Minneapolis, but there's a market in Minnesota where it's standard to list your house for sale 10% above market value Des Moines doesn't work like that though.
So listen to your agent when they tell you the pros and cons of pricing 10% above market value.
Then of course, if you were to list even higher than that, which you might be inclined to because the market is pretty hot. So you think this is my chance to get a ton of money for my house. When you list 15% or more above, you're going to get 10% of potential buyers looking at your property.
This is also kind of the "crazy" range. When you overprice your house, people think "they're crazy". And I don't want to deal with that. So hard pass.
Now, maybe your house is not in market value condition. Maybe it's dated. Maybe there are some repairs that may need to be done. Maybe there's a giant hole in the roof, no judgment, but it's not in market value condition. So what if you priced it at 10% below market value? Well then of course, you're going to have more people looking at your house. So 75% of potential buyers in the marketplace will look at a house, 10% below market value.
15% below you guessed it- 90% of potential buyers in the market will look at that property. You often see foreclosures, short sales, other kinds of distressed properties priced in this 15% below market value.
However, you knew there was a however coming. However, no matter if you are pricing your house 15% or 10% above market value, people are going to want to pay market value. So you can expect the people who are not scared off by you overpricing your house. You can expect them to negotiate in here.
And then if you overprice your house and you make the mistake of not reacting quickly to lower it, to be more in line with market value, to get more potential buyers looking at the property, you're going to waste some time and have it sit on the market. And now people think there's a problem with your house because it's been on the market for too long, in their opinion. So now you might actually risk selling for less than market value.
On the flip side, if you price it 10-15% below market value, and all of these extra buyers are looking at your house and it's a really good deal, then chances are pretty good you're going to get multiple offers. And ideally it would sell somewhere within this market value range.
Well, hopefully we've answered many of your questions about pricing your house, but I realized the video I put together was really long and well, I'm afraid you're going to be bored. So instead of one big 20 minute video, I'm making three smaller videos.
So stay tuned to have your questions answered about what you should do if no one writes an offer on your house and strategies to get into a bidding war or attract multiple offers on your house.
And then, if you're buying a new home in the area you'll want to consider how you can SAVE during that process:
WHAT IF YOU COULD USE SOMEONE
ELSE'S MONEY TO BUY YOUR HOME?
If you've been thinking about buying a house in the Des Moines area, you should download our expert guide to finding FREE MONEY in Des Moines.