True or false: If you receive 6 offers for your home and sell it for well above list price, you made out like a bandit and should be jumping for joy. You’re probably thinking “That’s so obvious! What do you take me for?” Well, sorry to tell you this, but “true” isn’t necessarily the right answer.

Don’t feel bad.  Most sellers and many agents alike think this is always true. But, really, it may not be. It all depends on the fair market value of your home. Here’s the mistake many people make:  You list your home for $899,000, receive 6 offers and sell it for $975,000. You’ll probaby be very happy. It’s very exciting for you and your agent to tell everyone there were six offers and  your home sold for $76,000 over list price.  But what if you find out that your home is really worth $1,000,000 because that’s what similar homes have been selling for lately? Not so happy anymore, are you? Ignorance may be bliss, but it can also be very expensive. In this situation, you would’ve been better off listing your home for $1,025,000, receiving only one offer and selling it for $1,000,000. You and your agent wouldn’t have a great story to tell everyone, but you’d have an extra $25,000 in your jeans.

This type of misleading result happens all too often. Before you list, make sure your agent shows you what similar homes have been selling for. Ask your agent for his or her opinion of the fair market value of your home. You can only talk about the list price that’s best for your situation after you know the fair market value of your home. Don’t buy it if an agent suggests you list low and let the market determine the fair market of your home. I may be wrong about this, but when I see an extremely low list price, and we agents recognize those right away, it suggests that the seller and the agent don’t know what the right price should be and haven’t taken the time to find out. If you do end up making a fully informed decision to choose a low list price and it turns out that your home ends up selling for less than its fair market value, your agent may say something along the lines of “According to the market, your home isn’t worth $1,000,000”. Take this with a grain of salt. How do you know if you never even tried to get that amount? Maybe if your home was listed at $975,000, you would have received mutliple offers and the price would have been pushed to $1,000,000. Or maybe if you listed it at $1,050,000, you would have received one offer and sold it for $1,025,000. A good agent will recommend a price and strategy designed to give you the best opportunity to get at least fair market value for your home.

If you look at the top banner of this website, you’ll see the line “Honesty and Integrity Above All Else”. We don’t just say it; we really believe in it. If you sell your home for more than fair market value, sure, tell the story to everyone you know. But if you receive multiple offers and still sell your home for less than it’s fair market value, please don’t crow about it and, worse yet, don’t allow your agent to crow about it either. You may have a good story to tell, but the bottom line is that you left money on the table and, at the end of the day, that’s not the result you want.