If you are not really-really sure about your pricing, don’t go into battle without a Pre-Listing Appraisal.
In school, getting the answers before the test is cheating. However, when it comes to selling a home we believe it is essential to get the highest sale price and the best terms. It will definitely raise your Selling I.Q.!
Home Sellers are often skeptical about agents when it comes to setting the List Price to market their home. Given the amount of effort some agents put into pricing, that is probably not an irrational thought. There is a very natural fear that the real estate agents are going to come in with a low price so that the house will sell quickly and be less work.
Here are some lessons we learned from the Great Recession and the beginning of the recovery:
- List Prices that are too high backfire into lower sale prices
- List Prices that are right on or too low draw multiple offers and the price rises as buyers compete for what they want
Ultimately, the appraisal is the last variable in the pricing equation because most buyers are borrowing money. A problem arises for the Seller if the appraisal comes in below the contract sales price. At that point, the house is “guilty until proven innocent”. The reason we started incorporating a Pre-Listing Appraisal into our home selling strategy is so that the house starts out “Innocent” and our appraiser is on duty throughout the process to defend the price. That way, if the buyer’s appraiser comes in low we have a ready defense and a certified appraiser making our case for us.
Our home selling strategy has been hugely successful because it protects home sellers from costly surprises that could have been discovered up front. This goes for Pre-Listing Inspections as well. A home seller has very little negotiating leverage if they are not prepared when the buyer’s inspector and appraiser come calling. That is no position to be in!