List Price is a Marketing Strategy

Your Triangle Area home’s list price is not a statement of absolute value- it is a marketing strategy.

There is no law that says you must sell a home for the list price, and, in today’s market, there is little expectation that a home will sell for the exact list price.

Today’s buyers in the Triangle Area Real Estate market understand that a list price is just a starting place for a conversation.

This means the homeowner gets to decide what kind of conversation they want- fast and intense, calm or leisurely?

Here are the three most common strategies.

Aspirational Price

What is it?  The aspirational price is at or above the very top of the expected price range for a home.

When should you use this strategy? If the home has unusual qualities above it’s competition or if the homeowner will only sell at a certain price.

What are the benefits?  If the home is really unusual (amazing quality, view, size or amenities), an aspirational price helps the buyer to consider the merits and value of this particular home, rather than how it compares to other homes.

What are the dangers? Today’s buyer’s have access to more information than ever before.  If a home does not represent a reasonable value on the surface, a buyer may never visit to discover the intangible qualities of a unique home.  This may eliminate a buyer who can well afford a home of higher quality, had they simply known about it.

What can I expect? Marketing times are generally longer, sometimes two to three times longer than other strategies.  Showings are less frequent, with more notice and preparation time.  Negotiations are also at a slower pace, often starting with a lot of verbal dialog.

Fair Market Price

What is it?  Fair Market Price is right where you expect the home to sell, most often in the middle of the expected price range.

When should you use this strategy? This is the most common and comfortable price strategy for both buyer and seller. The best use is when a home confirms in size and quality to the homes around it.

What are the benefits? Because there are not enough homes to satisfy buyer demand, a Fair Market priced home is likely to receive more than one offer in a reasonably short period of time.

What are the dangers?  If your home is in very high demand- it presents as a model home, or has great emotional appeal- one or two offers may not bring the highest possible offer.  Also, if the market experiences a sudden shift, you may find yourself unintentionally at an aspirational price.

What can I expect?  In general this is the safest and most comfortable price strategy for both buyers and sellers.  You should experience strong showing activity for 7 – 10 days followed by a few offers.

Event Market Price 

What is it?  Event Market Price is a bold move that should be used with caution.  It is pricing a home at, or well below, the low end of the expected range.

When should you use this strategy? When you want to use the auction mentality to drive a price as high as possible through competition and the excitement of the crowd. This tactic is especially useful when the home is well located, but in very poor condition.

What are the benefits? Properly executed, this strategy can net the highest price possible.  It leverages the crowd mentality to stimulate your ideal buyer into paying more than they would in a single negotiator situation.

What are the dangers? Many homeowners fear that the “crowd” will NOT net out the highest price possible.  And, obviously, no one can guarantee the results.  Also, emotions will run high during this marketing period.  Not all homeowners will be comfortable with this.

What can I expect? Event Price Marketing is very fast and intense.  Prospective buyers will be excited and aggressive at tightly controlled showings and public events.  At the end of the set marketing period, often 7 – 10 days,  you should have a large number of offers to negotiate, and you can expect to control both price and terms.

Are are no absolutes in pricing strategies.  Just because Fair Market Pricing is the most common, does not make it the best for you. Choosing the right strategy depends on your situation and risk temperament.