Allowing a seller to go on the market for significantly more money and in compromised condition is a recipe for failure.  We fail our clients when we empower sellers to act in their worst self-interest by letting them dictate terms that doom the transaction.

This may appear superfluous, but if you are trying to create a bidding war, addressing every minor detail of the property is crucial.  RE/MAX International puts out a great three-minute training video for agents about “staging a closet.”  For many homeowners and agents, staging a closet is over-the-top.  But when you hear Trish Pachak of “We Stage Colorado” speak, she has an insider’s view that is invaluable.  After some common sense approaches to cleaning out the closet to make more space, (storing out-of-season clothing away, hanging items up with short-sleeves to long sleeves gradually, getting rid of extra shoes and accessories to make the space look bigger) she adds the most shameless, yet brilliant, tip.  She stages closets with baskets of pretty soaps and lotions and accents with shopping bags from high-end stores, Nordstrom’s and Victoria’s Secret saying, “We need to pay attention to the consumer.  We are selling lifestyle.  Stage a closet so that it matches the socio-economics of the neighborhood to make it more emotionally appealing to the client.”  Yet again, an expert declares that we need to be emotionally appealing because that is how you sell a property faster and for more money.

Without hammering on price, if the goal is to inspire a bidding war it is critical that the home is priced on the money.  What does that mean?  Finding the price that makes sense to almost everyone who walks in the door.  

Here is mom’s (Peg Botte) definition of the “right price.”  The set up is this.  It is universally recognized that buyers don’t want to pay full price in real estate if they don’t have to.  It would be hard to meet a buyer who sets out with an attitude of “I want to pay full price.”  Yet if agents are pricing property correctly, that same buyer who doesn’t want to pay full price, will pay asking price or more under the right circumstances.

What is the right price? “The right price is the price a buyers hesitates to pay, but feels that if they don’t, someone else will,” reports my mom.

To inspire a bidding war the property must be priced at the “right price” per the above definition.  Otherwise, buyers may want to buy the property, but feel the seller’s asking price is a bit high, thus, there is no urgency to buy the house, because it is unlikely that other buyers will perceive it to be a good value so the waiting game starts.  The sellers wait for an offer.  The buyers wait for the sellers to signal that they are realistic by reducing their price.

If sellers are bent on selling a home quickly, putting a price tag on the house that is below market value will attract a lot of attention.  The house then becomes a “good deal” for someone looking for an opportunity.  It may seam counterintuitive, but often the way to get the most money for a property is price it just under market value which garners a lot of attention in the market.  I subscribe to basic Macro-economics 101, the market determines the value and if the home is put on the market at a sharp price the price will be driven up if good strategy is employed by the listing agent to assure all buyers have a chance to make their best offer.  But to leverage the sale, a good agent has a lot of work and strategy to employ.

Tune in next week for concrete ideas for Agents and Sellers to Inspire a Bidding War.