Imagine, if you will: you are thinking of selling your condo, which you love but have outgrown. But then you hear all this talk from other sources about properties “selling over list.”
You wonder, what does “list” means? And other terms you might hear like “list price.” How it affects you? We explain this to you.
The listing price is the price that a property owner is asking for a property that is for sale. It is also referred to as the asking price.
When a property owner lists a property for sale, they engage the services of a listing agent to represent them in the offering. The listing price is named in the Listing Agreement and the property is cataloged in the Multiple Listing Service, often referred to as the MLS.
The listing price is determined in a collaboration between the seller and the listing agent. The price may be adjusted by the seller anytime up until the property is under contract. This is often done to bring more buyer interest to generate a sale.
Usually, it is less scientific and objective than one might think. Presumably, they use market data like comparable sales, competing properties, and market trends, but there is no guarantee. The process can be deemed as more strategic than scientific.
There are three main strategies that sellers and their agents use to come up with the listing price:
- The list low to create activity strategy, where the property is listed below the anticipated sales price with the expectation of generating a bidding war, thus driving up the sales price.
- The list high and negotiate down strategy, where the property is listed above the anticipated sales price with the expectation of negotiating down.
- The just right or Goldilocks strategy, where the property is listed as close to the anticipated sales price as possible.
There is no single best strategy and there are advantages and disadvantages to them all, which we will cover in future content.
We recommend not just relying on the listing price. Smart buyers and sellers know that a listing price is just a start, and it has a wide meaning when you are looking at a property and having your own valued opinion.
Whether you are getting ready to list your property or if you are evaluating one to buy, we strongly recommend that you find an agent you trust. An experienced agent has been through the process many times and can help guild and advise you through throughout the entire listing or purchase. Here at the Mike Dunfee Group, we are ready to help.
Dunfee Real Estate Services
DRE # 02026232
