The Science of Pricing

The Science of Pricing

Today we continue the conversation of how the Science of Pricing affects the listing price of a client’s home. Spica Real Estate values relationships above the transaction and we are committed to making sure our clients are heard, valued and understood. Part of this, is respecting the motivation level of a potential seller.

The motivation of a seller can affect the starting price of a listed home. While not a measurable science, it does have its tangible (and experienced!) risk and rewards. Many potential sellers who describe themselves as ‘unmotivated’ approach the selling process not only more laissez-faire, but also with a dream price point. In today’s upturn market, we have been able to offer the suggestion of pricing a home roughly 10{16e476496f5f3a73cb19f20a476d08f8bca71b0bf9338242f1d2bf6ed337f382} higher than estimated value to ‘see what happens’. This approach has its risks and rewards.

Rewards:
-The home could sell! We have had homes in recent upswing market days surprise us at selling for above our approximated value. Great for all parties involved!
-The home appraises! Even if you have a willing buyer at the higher price, the home still must be appraised for that amount. When it does, it is a great reward for the sellers and confirmation for the potential buyers and good news for the neighbors who are thinking of selling!

Risks:
-The home sits on the market for a long time. Often the days on the market dictates how aggressive a potential buyer may be in negotiations, assuming that a long time on the market means desperate sellers. This often is played out with low ball offers.
-The probable price drops after ‘waiting to see what happens’ can raise red flags in potential buyers minds leading them to be hesitant to make an offer.
-A great home can get buried in the MLS or email push of other real estate agents who may forget to show it to new prospective clients weeks or months later.

In the end, The Science of Pricing points to having open and honest dialogue between real estate agent and seller. Trusting each other, relying on the experience and wisdom, and being upfront about bottom lines and desired outcomes will be the litmus test of a successful transaction and relationship.