It is extremely important to price your home right from the beginning. Thinking you need room to negotiate or “we can always come down” is an excellent way to stigmatize your property and result in an expired listing.
This Open House sign is a good way to visualize the problem. They came down and down and down until they just wanted the bus out-of-town! In a buyers market it is very important to price aggressively to be in the market vs. slowly and painfully adjusting your price trying to find the market.
You have probably heard the lines before. An expired listing means you are the highest bidder. Pricing high only helps you sell the home down the street. Buyers will compare the value they get for your price vs. other similar homes in the same or lower price range. The longer your home goes unsold the more money you have thrown away in holding costs vs. using that money where you want to live.
The thing is, these are not just lines. They are all true. Home prices are dynamic. While it’s always about location, price is king and values change based on season, interest rates, inventory, competition, financing difficulty, jobs, tax rates, condition, personal situations, traffic, appraisal guidelines and many other reasons. The price you paid, your neighbors sales price or the price you think you should list for to give room for negotiation means nothing in this real changing world.
The best way to price right is to enlist the services of a good real estate professional to not only evaluate your home but advise you concerning the current and expected market conditions.
After pricing right, make sure your home is shown in it’s best light with proper preparation for showings and proper MLS photos. See my posts on why showing your home is like a first date and MLS listing photo pet peeves for more information.
After a short time on market you can tell by the number of showings and offers if you should adjust your price. Bargain hunters and investors look for homes that are stigmatised by many days on market or have constant price drops chasing the market.
Why buy now when it will drop tomorrow? I once had a seller tell me if his home didn’t sell this week-end he was dropping the price ten thousand dollars! My buyer bought it Monday morning for ten grand less.
Then you will see people who use the opposite method shown in the sign. They will price high, never have a single offer but refuse to drop the price. In 2007 that method might have worked as the market was coming up to ridiculous prices. It’s not 2007 anymore! They are like an auctioneer starting the bidding at a crazy number and saying over and over again, do I hear…?
He never hears it and it remains unsold. What these sellers don’t realize it that the buyer will see it’s been on market forever without a price adjustment and conclude the seller isn’t serious about selling or there is something wrong with the property.
It’s a crazy world so get some professional help! Call me at 469-233-1234 to price your real estate for sale right so you don’t end up like the sign example. By the way, if you love homes and are only a little off, check out Sarah Felix Burns’ blog. She is crazy about houses and let me use those pictures to make my price right point.
