Transparent pricing

Pricing reality check - it is transparent pricing, aspirational pricing, or motivational pricingHome sellers are employing different strategies to sell in today’s mixed market. One of them is transparent pricing.

Transparent pricing, aspirational pricing, and motivational pricing

  • Transparent pricing refers to the seller’s intention of offering the home for sale at a price that the seller is willing to accept. It’s what the seller believes to be fair market value.
  • Today some homes are priced with aspirational pricing, which means what the seller aspires to get.
  • Other properties have motivational pricing, or what I like to call mirage pricing. That’s an unrealistically low number used to obtain more offers and push the ultimate sale price higher.

Aspirational pricing usually results in homes that either don’t sell or that only sell after price reductions and at a price lower than would have been obtained with more realistic pricing.

Motivational pricing causes confusion for many buyers, especially if they are new to the market, or uneducated about that home’s neighborhood or the market, or those who are either discouraged or unrealistically hopeful about today’s prices.

Transparent pricing is supposed to be more honest about the seller’s wants, needs, and expectations.

Most of the time, new construction offers transparent pricing. However, sometimes there are so many upgrades that buyers will want that the final price can be considerably higher than the base price.

Sometimes, though, when a listing agent describes the  price as transparent, it’s actually on the high side and is likely closer to aspirational pricing. In those cases, the label really only tells you the seller’s willingness to sell: “I’ll sell if and only if I get my price”.

How can you tell if the listing amount is realistic or too high or too low?