When homeowners list a property on Zillow Make Me Move (MMM), their instinct is usually to assign a high price tag to their home that will literally make them move because the profit is too big to ignore. But is this the right way to price to maximize your odds of getting the highest final sales price? Read on to find out.
What Determines Final Sale Price:
Here’s a hint: it’s not your list price! Think about it… if your home is worth $500,000, and you price it on Zillow at $1 million, do you really think you’ll get $1 million (or anything close to it) at closing? Of course not! Arbitrary price points don’t make sense in real estate because…
The factor that overwhelmingly drives your final sale price is how much competition there is among buyers. If lots of buyers want to buy your home at a single point in time, that’s a very good thing. Interested buyers will be forced to bid more in order to have a shot at getting their offer accepted. Competition drives up your sale price.
But the opposite is also true. If there’s only one person interested enough to write an offer on your home, they have the time and ability to lowball, stall and negotiate with you. If you find yourself in this position, you have to ask what you can do to get more buyers interested.
Data Doesn’t Lie:
Zillow CEO Spencer Raskoff wrote a book called Zillow Talk. In that book, he uses Zillow’s immense data to illustrate why sellers who price higher than fair market value typically receive 4% less money at closing than they would have if they had priced their home at or below value. As an example, a seller of a one million dollar home in California will make $40,000 more at closing if they price their property at or below value. That’s a lot of money!
So why do most sellers overprice their homes on MMM or when they list as a Zillow FSBO? Raskoff makes the point that sellers price wrong because they are driven by fear, not logic. They are afraid of leaving money on the table by not getting the highest possible sales price. To avoid that outcome, they price high hoping they’ll be able to maximize returns. Unfortunately, following this instinct is dead wrong, as per the data.
How to Apply These Pricing Stats to Make Me Move:
For the reasons outlined above, assigning a high list price to your home on MMM won’t help you get a high sales price. In fact, this is actually a recipe for a lower sale price. For best results, you should price your home at or below value to spark the kind of buyer competition that leads to higher offers.
Depending on what your objective is, MMM may or may not be the best tool to help you get there. But regardless of whether you use it or not, make sure you follow the pricing advice outlined above when you list your home to get the best return on your investment when selling without an agent.
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You can see our last 200+ sales on Zillow, and we can provide you with A++ references. Our rates start as low as $2,000, paid at close of escrow, so it is risk free for you.