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the percentage difference between asking and selling price

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April 06 2010 - Beverly
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Hello Ruby,

I am guessing you are asking what is the difference between the asking price and the selling price.  That is a question that cannot be answered.  A home is worth what a willing buyer will pay for it and the asking price has nothing to do with that. 

If a home is listed too high for the market it will sell for considerably less than the asking price and take a long time to sell.  Because of the pricing is out of the market the home will not get very much traffic and most likely no offers. 

If you price a home in the top 10% of homes that are selling in that month for that type of property the home will sell quickly and for very close to the asking price.  Sometimes you can even have a multiple offer situation arise and receive more than the asking price.  This has happened to my clients multiple times on the buyer side and the seller side.  In fact it happened just this week for a home my clients are buying.  They loved it and it had 3 other offers and they bid higher than the asking price and their offer was accepted.

The common misconception sellers have is that they need to overprice their home with padding so that an offer can come in for less and they will still make what they want to make.  One major reason this is not true is because by doing this you are losing a certain percentage of buyers who will not even look or know about your house and less exposure always means less money to the seller.

Let me explain:  Let's say you price your home at $225,000 and your agent is showing you comps that show your home needing to be in the range of $195,000-$200,000.  You feel strongly about this and list your home for $225,000.

Here is where the problem with that arises.  There are a lot of people looking in the $200,000 and under bracket.  Because your home is in the $225,000 bracket their agents will not even show them your house because it is out of their range.  Losing all that exposure is going to hurt the chances of getting the best possible price because you have less potential buyers.  It's a numbers game... you need and want maximum exposure and maximum traffic to get the maximum price.

So like I said at the beginning it is difficult to determine the difference between the asking and the selling price because of all the variables.  I do have access to reports for the Austin area that show these differences but they apply to the market and not to a specific transaction so they are not that helpful.

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April 06 2010
 
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