If you’re about to put your home up for sale, you may be tempted to aim for as high a price as you think you can pull off. But here’s another tactic that may be worth employing: underpricing your home.
You might think underpricing your home when buyers are paying more than ever is ridiculous, but it could help you walk away with a higher sale price.
These days, a large number of homes wind up subject to bidding wars. If you’re unfamiliar with the term, a bidding war occurs when buyers try to outbid each other for a property, driving its price up.
Say a home is listed for $500,000, and there are two offers for it. One potential buyer might come in with a higher bid of $515,000 to get their offer accepted, at which point another buyer might come back with $525,000. That first buyer might counter with $535,000, and the second buyer with $550,000. The result? A much higher sale price than the listing price.
Chances are, interest rates won’t stay put at multi-decade lows for much longer. That’s why taking action today is crucial, whether you want to refinance and cut your mortgage payment or you’re ready to pull the trigger on a new home purchase.