Is It Possible To Price A Home Too LOW? [Case Study]
This is a case study of a recent home sale where the seller received substantially more than the asking or listing price.
The property was bank owned and this means the seller was a professional. It maybe very difficult for the typically seller to ever consider listing their home priced substantially below market value. However, for professional home sellers, like banks, they know there is a proven strategy to get more money for a home. Banks are in the business of buying and selling homes, they do it thousands of times per year, and make decisions based on facts not emotion, this is why we consider them professionals. Fortunately, we look at some of their proven processes as they have already spent the time and money to determine the absolute best strategies to get homes sold for the most amount of money in the right amount of time.
The subject property recently sold is 209-211 Central Ave in Ocean City NJ. The seller listed the property for $274,500 and almost immediately had an influx of showings. I personally witnessed a line of buyers and their real estate agents waiting to access the home. The immediate result of so much activity was multiple offers from multiple buyers. Ultimately, the property was under contract in 9 days and sold for $430,100! Or, over 155% above asking price!
While this is an extreme example, there are many examples of properties selling well above asking price and market value. If a property is priced too high it will often get no offers, not even low-ball offers. However, when pricing a property below market value, multiple offers will bring the selling price up to and/or above market value.
The market value of a property is really how much the highest bidder (buyer) is willing to pay. There is only 1 "no fail" way to maximize that number and that is to start a bidding war between multiple buyers... The way to start a bidding war is to start with an aggressive price and let the bidding take the property at or above market value. Market value is not what you paid, what you need, what you want, what an agent says, etc.
Pricing aggressively and a resulting multiple offer situation also gets properties sold fast! We know from historical data that the faster a property sells the more it typically sells for.
Would you dare to list your home's asking price substantially below market value in order to achieve a bidding war and higher selling price?