One of the most common questions I get from sellers is whether people actually pay more than list price for a house. I was on a listing appointment recently and the seller wanted to price the home higher to leave some negotiating room. He said, “People don’t pay more than list price, so I want to have some buffer in there and start higher.” I looked at the comps for the neighborhood and pointed out that 4 out of the past 5 properties actually sold for above market value!
MYTH: I need to price a little bit high to make sure there is “negotiating room” with the buyer.
FACT: Buyers in Northern Virginia will pay above list price if a property is priced right. Overpricing your home leads to selling your home for LOWER than market value.
Northern Virginia Market Analysis
To prove this, I looked at all of the past solds in April 2018 for single family homes in Fairfax County. This was a total of 815 homes. A great sample size. Then, I compared the days on market for homes that sold between 1-14 days and between 14-30 days. Here are the results:
|Days on Market||Number of Properties||Median Subsidy||Median Close Price||Median Original Price||
% Close to Original
A few takeaways from the data:
- Buyer are willing to pay over list price, but only when a property first hits the market. It is very unlikely a property will go OVER list price if it is on the market more than 14 days.
- The best time to get the best price for your home is within the first 14 days it is on the market.
- Sellers who wanted to build in “negotiating room” (i.e., pricing a home at $672,194 versus $649,444) actually ended up with LESS money (i.e., closed price of $646,500 versus $650,000).
Let’s break it down by day. This chart shows the percent close price to the original list price versus the days on market. Essentially, the best time for buyers to bid over list price is within the first 8 days on the market. In fact, once the percentage dropped below 100%, it NEVER went above 100% again. Essentially, it is very rare to see anyone paying above list price after 8 days on the market.
Well, aren’t there always exceptions to the rule?
Yes, of course there can be exception to the rule. My analysis is based on the median data so there is a range even within all of the calculations. However, would you rather just hope you are the one exception to the rule when selling you home? Or would you rather base your decision on a sample of 815 homes that sold last month?
Thinking about selling your home?
If you are thinking about selling your home, I’d be happy to do the same analysis for you to determine the BEST price to list your home to get top dollar. Feel free to contact me directly at 703-349-0143 for a no-obligation consultation!