To list, or not to list is a question most sellers ask, at least if they don’t have to move immediately because of a job change or other life change. Is this the best market to list a property where you will gain the most advantage from a sale? The next question might be, how should you price it (meaning method of establishing value and what the actual price should be)? Some people pick a number out of the air based on a recent sale of a neighboring property. Some sellers carefully select a professional by interviewing several prospective Realtors® and then choosing the one they deem the most trustworthy. However, many sellers choose one Realtor® from the pack based solely on their stated market value for the property. In other words which ever Realtor® says the highest number gets the job, whether they are the best qualified or not. That’s a gamble!
Recently, a new marketing strategy has emerged in our market that has gained some traction among brokers who like innovation. It appears that in many cases the broker may not fully explain the risks to their clients and may not fully understand the risks themselves. The practice is to list properties well below the actual market value in order to create a situation that attracts multiple buyers who rush in to take advantage of the good deal, but then find themselves in a bidding war against other intense buyers. The intended result is that the price gets bid up to a point that is above and beyond the original expectation of the seller, and in a shorter time period than the normal listing.
While this strategy has become a trend among some brokers in extremely competitive markets, many experienced brokers are leery. Even though the seller has the final authority to reject any offer that is less than their expectation, this strategy seems dishonest to most consumers and to most cooperating brokers. “Bait and switch” is probably the best description for this deceptive practice! That’s a gamble!
Pricing your property too high has risk too, because your listing may become stale on the market and you may miss the window of opportunity to sell, especially if your move is time sensitive or it is a difficult property. That is a gamble!
It seems to me that the less risky strategy is an honest representation of the most accurate assessment of value.