Home Pricing and Stale Bread

So, here I am, flat on my back with pneumonia, and my thoughts are spinning. Too much to do, and all I can manage is a short burst of energy to make a phone call to a client before resting again. What's on my mind specifically? Pricing and stale bread.

In today's market especially, pricing is the most important thing to consider if you are really motivated to sell your home. It's not good enough to look at what you paid or how much you spent on the remodel or that you just redid your landscaping. It doesn't matter what an appraiser for your refinancing priced its value at. It's not even good enough to look at the price on your neighbor's house and price yours the same; in fact, that may even harm you!  Because people naturally compare the homes they view.

People looking to buy nowadays are looking for a "move-in ready" bargain. The price you set on your home means either people don't even bother to view it because it's priced above their limit, or they DO visit your home because the price is within their means.

But once you do get those people in the door, how is your home going to compare to all the other houses they've seen? If they can get bigger or newer or cleaner or more updated or more loaded for close to the same amount as you're asking, they're going to cross your home off their list of possibilities pretty darn fast. They naturally want the most bang for the buck.

When you put your house on the market, you should be pricing it at the level of what comparable houses have already sold for, NOT at the level of all of those presently on the market with yours. None of those have sold yet, so why do you think yours will?

Statistically, the quicker your house goes under contract after listing it, the higher the sale price is. If it hasn't gotten at least one serious offer in the first two weeks, when it's fresh, then it's probably priced too high for buyers to even want to consider an offer without offending you. And as the weeks go by, your house becomes more and more like days-old bread in the bakery, less and less attractive.

A great Realtor should watch the market closely, see what presently on the market, what sells and doesn't sell, and then should advise you on what you realistically can expect to get for your home. A great Realtor isn't going to easily let you set your price too high, and he or she certainly should advise you to reduce the price every couple of weeks, especially if you're not attracting any prospective buyers or if the feedback is negative.

Prospective buyers may say that the yard isn't large enough, or the colors in the house are not their colors, or that they want a custom-built house. But all of those comments come back to... price. If the price is attractive, they'll not be so bothered by the yard size. If the price is right, they'll think to themselves, "Well, maybe I can live with those colors." If the price is compelling, they'll overlook the fact that it isn't custom-built, because it's such a great house for the price.

Pricing is really controlled by the buyers out there, not the sellers. If you are seriously motivated to sell your home, you need to objectively consider: What is my home really worth to someone, warts and all? And price accordingly.

Yours in Smiles,
Abbey

Posted at 08:20PM Oct 08, 2010 by Abbey Turner in Real Estate  |  Comments[0]