Why would you EVER consider under pricing your house?

In Memphis, under pricing your home is a hard sell, but in other parts of the world that is exactly what they do- and it works.

Take Victoria, British Columbia on Vancouver Island in Canada for instance. ( I also have my real estate license there). When a home comes on the market, often times the realtor first figures out what price the property is realistically going to sell for, then they price it under that- and wait. Now, things are different there. Property is expensive and certain neighborhoods are greatly in demand. Sometimes the land the home is sitting on is worth as much as the home itself. I heard about one realtor who listed a home that had been built in the 1950’s that sat in a quiet cul-de-sac in Oak Bay- a very nice district. They figured the house and lot were worth about $600,000, so they priced it at $575,000 and waited for 10 days before they opened the bids that were coming in. They sold it for $625,000. Pretty good, huh?

Now I know that this will NOT translate well in most parts of Memphis. Some of the suburbs lack the pent up demand needed to pull this idea off- they are too generic and there is already a lot of competition out there. But in sought after places like Harbor Town or a spectacular condo unit with an amazing view- it probably will work. And it is certainly worth some consideration. 

Case and point- we had a client in Harbor Town who wanted to buy a home directly across the street from the one he was living in. In order to make this happen he was going to have to act fast. I went over and looked at the home he was going to sell- it was REALLY nice with an updated kitchen and baths, a great floor plan and a corner lot. We discussed price and determined that the probable selling price of the home was going to be $375,000. So he could have priced it at $399,900 and waited for an offer, which is what most people would do- but instead he said “lets list it for $374,900”. Good  call! Within 2 weeks we have 2 full price offers- he just had to chose which one he liked more! The deal was done and -voila- he was able to buy the home he wanted !

Another case and point was the condo that my husband, Tim, and I bought earlier this year in the River Tower building. Now, the thing that sets these units apart are the view that you can get from some of them- if they are facing north and are above the 5th floor they have unobstructed views of the Mississippi River and the entire city! Jaw dropping! 

This one was one of those units. There were several units like it that have been on the market for a long time- they were all priced over $200,000. So, after analyzing that fact- we decided that the probable selling price was about $170,000. We priced it at $169,900, got multiple offers and sold it for $ $180,000. 

So, it probably comes down to confidence . If you are sure that people want your home then you may want to play the game.....