Strategic Pricing

I find that pricing strategy is one of the most
fascinating aspects of a real estate transaction. Depending on the market, I’ve noticed that sellers can and do list
their houses for sale at either higher or lower than their hoped-for sales price.

Counter intuitively, a house priced below market value could actually sell for more than its assessed value. I learned this the hard way recently and lost out in a deal on a townhouse in our neighborhood despite an offer above list and a healthy escalation. If you list a house for sale at a price that’s attractively below market value, the demand created could actually ensure that the sales price is well above the listing price. Our agent was told that ours was the tenth offer received.

Good pricing strategies will obviously vary by geography. There are probably markets in which it’s a good strategy to "go high". Debi Averett  has noticed that list prices differ from sales prices in Gilbert, AZ. In this case, most homes are listed above their final price. Debi reviewed all of a recent week’s transactions and found that;

7 properties sold within $1,000 of Zillow Estimate (50%)

2 properties sold for higher than Zillow Estimate (14%)

5 properties sold for lower than Zillow Estimate (36%)

To analyze list prices, Debi then looked at the 11 houses that were for sale on the same streets as those that had sold. Every for sale property was priced above its Zestimate, with an average list price $ 23 K above Zestimate.

Debi concludes that list prices are too high in Gilbert — and that may well be, but over-pricing listings may also be the best pricing strategy in their current market. What pricing strategies have worked well (or not so well) for you?