Pricing Homes in the Denver Area
After staging, inspections, advertising and negotiations are done, choosing a listing price is a very important decision. Advertise a price that is too high and few people will look at the property. The consistent stories I hear indicate sellers do not look at properties until the price is within 3-5% of a realistic selling price. Anecdotal evidence suggests that prospective buyers will search web sites, such as www.recolorado.com and others, to find properties that look like the best buy in their geographic area based on their criteria. If a property doesn’t look like a potential “best buy”, they don’t visit the property. If the property looks like a potential “best buy”, they will likely do more Internet research, or drive by, before scheduling a showing.
Many sellers are afraid to advertise a price that’s too low because they want the highest possible price for the property. Anecdotal evidence from today’s market indicates that properties that are listed too low will draw many showings very quickly along with multiple offers. Prospective buyers may then bid the price up in what is sometimes described as a “bidding war.” Some banks and others seem to be using this eBay-like approach very effectively in today’s market. Note that making this work well requires the property be widely advertised and exposed to a maximum number of prospective buyers.
Regardless of pricing strategy, it is important to recognize that many agents set up automatic email to prospective buyers letting the prospective buyers know immediately when a new property comes on the market. Evidence suggests that the best buyers for a property have a loan in place and are ready to make an offer on a property that meets their criteria as a “best buy.” Note that a “best buy” is always based on the buyer’s criteria and there are buyers for all kinds of property. Some are looking for a pristine property in move-in condition. Others are looking for a property with buildings to be scraped. Other are looking for everything in between. Putting maximum accurate information in the advertising seems to be important because there is a buyer for anything if it is priced right.
