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If you are selling your home, one of the most important things you have to determine is your list price. When determining this list price, you want to know how much negotiating room you should build into the price, in anticipation of the buyer wanting to bargain.
Some agents say start high, then you can come down. Others say start low, and you’ll get a lot of activity and create a bidding war. I think there are downsides to both of these methods.
When you start too high, you scare people off from the get-go and don’t get much activity. By the time you lower the price, people aren’t going to rush back because the home didn’t get much activity in the first place and it has been sitting on the market.
Under-pricing can sometimes pay off with multiple offers and bidding wars, but if you happen to hit a low week, you may have to sell your home for much less than you anticipated.
I think the optimum amount of negotiating room on a contract is 2%. It allows you to get people in the door, while leaving it slightly open for negotiations.
If you have any real estate questions or needs I can help you out with here in San Diego, give me a call or send me an email. I look forward to speaking with you!
