We often hear agents say “Our homes sell above asking price.” How did that happen?

We often hear agents say “Our homes sell above asking price.”

How did that happen?

Was it an intentional strategy? Was in luck? Was it an accident?Depending on what era of real estate you grew up in, many buyers and sellers have different senses they're always supposed to do. Negotiate or not to negotiate.  

It is important to know if you are in a buyer’s market, or a seller’s market. It varies from market to market, and from economy to economy. It also depends on your current situation. Do you have (or need) to buy/sell? Or is this a long-range plan?

All seem to be valid questions and concerns, so I asked the following questions on a Real Estate Agent Facebook Group.

I understand buying and selling during this pandemic is a different animal than buying and selling pre-pandemic, so this question concerns before Covid-19. We all hear the stories of sellers getting above listing price for their house. I would like to ask those who have experienced this, or know first hand of an experience such as this, what were the reasons behind the sale above listing price: A-1 List price was below market, A-2 Market had low inventory, A-3 Agent/seller wanted to start a bidding frenzy, A-4 Another reason (please explain). Follow-up question B: did the initial deal go through: B-Yes or B-No. If No follow-up question C, did it not go through because: C-1 Financing fell through; C-2 did not appraise; C-3 other (please explain). Thank you for your time and honesty.

I received well over 100 comments in a matter of hours.

20% of Agents responded they purposely listed below market.

76% responded that it is primarily based on low inventory, the laws of supply and demand.

4% admitted to developing a marketing strategy to purposely start a bidding war.

83% of these deals eventually closed, because of fair appraisals, revised appraisals, an additional down payment to satisfy lenders, negotiations involving revised offers or adding seller concessions.

The takeaways are two-fold:

• Selling for higher than asking is most likely a case of low market inventory and a good to great property presentation.
• Most deals get worked out and close successfully.

All of these factors should be discussed with your Realtor in order to determine your individual approach.