How To Get More Offers In A Challenging Market
Pricing a home in Florida and New York is an art. CMA's (comparable market analysis) performed by Realtors are a good estimate of value but the resulting price analysis may have a range of from 20-60K from low to high expectations. Higher end homes above $700,000 may have even a wider price range of estimated values.
Pricing your home correctly brings more showings from Realtors and from buyers looking on their own on Realtor.com and other websites. Don't underestimate what the general pubic knows about a particular neighborhood. Buyers have Zillow, tax appraiser websites, friends in the neighborhood or have possibly seen your home before from a previous open house.
Drawing out offers or buyers is how deals happen. For any home, there are likely three qualified buyers out there but only one of those buyers will be willing to pay you enough to ink a deal. The other two will be low-ball-hopeful offers trying to buy something under market value. Sellers that are successful in the this market do sell at "market" prices which unfortunately is not great for sellers but that doesn't mean you sell lower than a fairly negotiated competitive price.
To find that one buyer that will pay-up or pay you fair market price, you need to draw in as many showings as possible. As a result of the frequent showings, your feedback from the showing Realtors will also help you zero in on value and help spread the word to their fellow Realtors about that well-priced home!
Before an offer is presented, the buyer's agent always runs comparables (CMA) for two reasons.
First, they want to justify to their buyer that they are offering the right amount based on a scientific study (CMA) and secondly, if a deal is made and there is financing involved, then the home will have to hold up to an appraisal. Many deals over the past two years have fallen through because the appraisal came in lower than the sale price.
For all these reasons and the fact that we are in a buyers market, price your home as close to where you will accept an offer as possible. I suggest leaving as little room to negotiate as possible because while most buyers expect to be able to negotiate 10% off the list price, it is not a rule or necessarily in the best interest of the seller.
Here is my reasoning. Realtors and buyers are smart. They know the local market as well as anyone. They have possibly looked at 20 homes and understand which listings are priced to high, which ones are reasonably priced and the ones that need too much work.
Buyers are looking for as close to a turn-key home as possible because in a buyer's market the replacement cost of well-priced homes is as much as 20% higher than what those homes will eventually sell for. That is the same reason why builders aren't building and wealthy people, hedge funds and other institutional money managers are buying real estate. This is the same reason why upgrading your kitchen or bath might not be the best idea.
With all this said, trust the fact that buyers and Realtors only buy homes at what I call "the market". That 'market price' is what they are willing to pay for your home or the one down the street regardless of what price you may initially list your home for.
Therefore, it is far better to price realistically on the low end of the range of estimated value (CMA), get more showings and ultimately a higher sales price. Holding firm with negotiations might initially surprise the buyer and the Realtor but if your property is priced well, they know it and so do all the other buyers and Realtors that will see your home or have already seen it and may be back in a few days to make an offer!