If my home sold in a day, was it underpriced?
The answer to this is…..it depends. It depends upon:
• What are the seller’s goals, needs, timing?
• What is the current market?
• Is the house the only similar home available in the neighborhood?
• Are you positioning the house to deliberately create a bidding war?
The seller is the boss
The listing agent’s goal is to educate the seller on all aspects of the current real estate market so that the seller can make the best decision about where to position (price) the home within the market. Pricing depends on not only what is happening in the market but also what are the seller’s goals?
For some sellers, time is of the essence and a speedy sale has monetary value for the seller. It might be worth a seller pricing just below the market in order to get an offer quickly.
For other sellers, getting the price they want is more important and are willing to stay on the market longer.
If you received an offer on your home on the first day, would you accept it? Wait for other offers? Reject it outright? It all depends on what your goals are for the sale of your home.
The first offer may not be the best offer
The blanket advice I’d offer for sellers in a fast-paced market is to let the house “season” on the market for a few days. In the Olympia, WA market, we have a provision in the listing agreement that allows for a seller to review offers on a future date. For example, if the house was listed on June 1st, the seller would review offers on June 5th.
This delay in response has shown to be a very profitable tactic for sellers in my current market. Some benefits of this delay in response include:
• Giving time for more potential buyers to see the home and to submit offers.
• Quelling the anxiety and rush buyers in a fast-moving market are feeling.
Why is this important? Because too many buyers get into auction-mode and end up submitting an offer and escalating their offer just because they are in the frenzy of a bidding war. Sometimes these buyers who end up “winning” experience remorse and then back out of the transaction.
Evaluate what is happening in the market
- How many showings are happening?
- What is the feedback?
- What is the competition? How many homes in this price range/location are available for sale?
- Is the market in a decline or on a rise?
- Are the marketing, the photos, the description effective?
Every market at any given moment is different, and your Realtor can guide you. For some properties, getting one showing a week is very positive while for other properties, this is disastrous.
Planned multiple offer strategy
Some sellers want to create a bidding war with the thinking that they can get more for their house than if they priced it at fair market value. This strategy definitely has its pros and cons, and those are unique to each seller and each property.
In general and in my experience, most buyers do not want to be involved in a bidding war. In fact, I’ve had some buyers give up in this seller’s market because they don’t want to compete.
Deliberately trying to create a bidding war can backfire for sellers. If buyers don’t want to play the bidding game, the seller may end up with a much lower offer than they had anticipated. It all depends on the property, the market, the buyers and the sellers involved.
Sellers, talk with your Realtor and discuss what the best listing strategy would be for you and the property. One of the many good things about real estate is that there are several ways to reach your goals.
It takes an experienced Realtor on your side who can objectively discuss the best strategies for you so that you are not left asking the question, if my home sold in a day, was it underpriced?