Just understand that in order to do this, you need leverage, and in order to get leverage, you need buyers competing against each other. Without effective marketing or multiple offers, you are not going to have leverage to counter back to buyers over the initial listing price. Even in a seller’s market, you as the seller do not have alto of leverage if you only have one buyer.
Let’s look for a moment at the format of a traditional auction. Now action houses have been using their techniques for hundreds of years in order to get the most amount of money for any particular item.
They start at a reasonable asking price, to create interest, and then get the momentum going, by having lots of buyers in the room, competing against each other. An auction can create a sense of urgency and a level of competition from the buyers that generate offers that are well above, not only the initial opening bid, but also many times at a price that is well above the actual value of the item or its appraised value. What the auction house is doing is creating leverage for themselves, to get them the highest price possible by pricing the item correctly and doing effective marketing to get buyers in to the auction.
Now let’s apply this same tactic to real estate. Over the past few years, banks have needed to sell off foreclosure properties and sometimes do so quickly. So what they figured out was that they could put a home on the market, at a price that was at market value or a tad under. In the end they would receive multiple offers that would drive the price up 10s of thousands of dollars over the initial asking price. I saw this happen time and time again.
Many times I would see a bank list a property for a price that was a little too high. When it didn’t sell they would take it off the market and transfer it to a huge real estate auction house (the kind you would see on TV) and then start the bidding at a very low price. From there I would see hundreds of bids come in and the properties would sell well over the initial asking price it originally had been on the market for, it blew my mind.
Now I am not saying you should list your home ridiculously low. But what I am saying is that you want to at least be in line with market conditions and have aggressive marketing that creates value to the property, from there you will be able to generate multiple offers and bidding war. This will ensure you sell your home for the highest price possible and give you the leverage to counter buyers at a higher price even if it is above the initial asking price.
If the highest price isn’t acceptable to you, then you do not have to accept any of the offers and you don’t have to sell your property. And if you work with me, you can cancel your listing at any time and simply not sell the home. But if you list your property too high and without aggressive marketing or at a price that only generates one offer, you will never really know if you are leaving money on the table or not, and this in turn can cost you thousands of dollars when selling your property.
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