4 Pricing Strategies

Here you will find the four most well-known pricing strategies for selling real estate:

1. The "Far-Above-Market-Value" Strategy

Following the motto: There's always room to negotiate.

Inexperienced sellers often opt for the "Far-Above-Market-Value" strategy. They speculate on finding a buyer who is unfamiliar with the market and will "accept" the inflated price. Unfortunately, this strategy rarely pays off. Nobody pays more for a property than it is worth – especially not when six-figure sums are involved.

If you start out by pricing too high, you are more likely to deter potential buyers and may miss the window of opportunity for your sale. Because buyers observe the market: the longer a property is listed, the more skeptical they become. Things get even worse if you subsequently lower the price step by step. This gives the impression of a problem property, which quickly becomes a slow-moving listing as a result.

Ironically, the "Far-Above-Market-Value" strategy often results in the final sale price achieved being well below the fair market value.

2. The "Slightly-Above-Market-Value" Strategy

Here, sellers list their property 10% to 15% above market value in order to give themselves enough room for maneuver in later price negotiations.

An approach that seems understandable at first glance. On the other hand, even a slightly elevated price is enough to deter price-sensitive prospective buyers. Ultimately, it comes down to the same result as Strategy 1: the property often stays on the market too long and may develop the image of a problem property. In quite a few cases, a purchase price is achieved that is below market value – and you bear the loss.

3. The "Fair Market Value" Strategy

Our experience has shown that this strategy is the most successful way to sell your property. If you list your property at fair market value from the outset, the chances are very good that it will find a buyer within a reasonable period of time.

But – what is fair market value? Determining the right price requires thorough knowledge of current market developments. It is best to leave this tricky task to a real estate agent, as they have the most up-to-date and accurate information about the market.

4. The "Below Market Value" Strategy

The fourth strategy is the favourite of sellers who are under time pressure and want to sell their property quickly. What at first glance appears to be a particularly simple and straightforward option is often attributable to the fact that the seller is not aware of the true value of their property.

The high demand that such a "bargain" generates can, to some extent, drive the listed price up slightly. Nevertheless, through excessive haste and lack of knowledge, you expose yourself to the risk of losing money.