This article from REALTOR® Magazine piqued my interest because it’s a theory I try to explain to my clients all the time. A real estate agent in Oklahoma had his clients list their $413,000 home for $1 to ignite a bidding war. Just 2 days and 7 offers later, the sellers ended up getting slightly above what they expected to begin with. And while I would never actually recommend a client list their home for $1, there is some weight behind the idea.
The beauty of the market is that it corrects itself, and it always tells you what it will bear. You can never really price “too low” or “too high” without getting a clear message one way or the other. If you price too high, you’ll have minimal buyer interest and the home will sit until you lower to market value. If you price too low, you’ll likely generate multiple offers which will bring the price up to market value. And if you price just right (are you getting notes of Goldilocks yet?), you’re bound to find yourself with a solid offer within the average days-on-market timeframe for your area.
So when your real estate agent suggests a price that seems off base at first, consider the strategy behind it and remember your ultimate goal — to sell for the right price, in the right timeframe, and move on to your next adventure!