EVERY SELLER WANTS
CONTRACT ON DAY 1
SALES PRICE 20% ABOVE MARKET
QUICK CASH CLOSING
MOST SELLERS GET
MAYBE WEEKS BEFORE A CONTRACT IS SIGNED
SALES PRICE WITHIN 5% OF MARKET
CLOSING DATE DRIVEN BY BUYER’S LENDER
NEED TO MAKE REPAIRS
Pricing, pricing, pricing!
The very first question we’re asked after “How much do you think my property is worth?” is “How long will it take to sell?” We often say that if you’re getting no showings, it’s your price. If you’re getting showings and no offers, it’s the property (at that price). Simply put, pricing is the most important thing. The more accurate your pricing, the faster you will sell. It dictates how long your home sits on the market, whether it sails through a loan process and how picky your buyers will be about the condition of your home.
Pricing above the market.
At the end of the day, a good realtor works for you! You have the final say in what your house is listed for. However, if you think your property is worth more than everyone else’s in the neighborhood, be prepared to own it for a while. The market is littered with overpriced properties, because people get attached to their homes and put sentimental feelings into their price point. Prices then start stair-stepping down as days on the market increase. In some cases, the cost to the seller of owning the home during the seller’s pricing “experimental” period exceeds the discount that would be required to sell it. Crazy, huh? Nope, we see it all the time, and almost every seller starts the listing process by thinking theirs will be the one case where overpricing actually works. It won’t work. It also just delays your success.
Your home in a community is priced much higher than what nearby homes sold for. Nobody can figure out why, because its features are similar to most other homes in that community. Nobody calls for a showing. You are frustrated. The listing Realtor calls other Realtors and potential buyers and holds open houses. The listing Realtor markets the home like mad. Still nothing. The Realtors who noticed the property when it first hit the market have seen it come to their Inbox so many times, they don’t pay attention to it anymore.
You’ve lost the attention of the market, and there is a vague feeling now that there is something wrong with the property (which there isn’t). Now, it is hard to counter the impression that the house is sitting on the market for reasons other than price. Even if the seller reduces the price to be fair, the reduction is not large enough to capture the attention of the market again. The home does not sell until there is a significant additional price reduction. The terms of the contract require many repairs, and you are now so happy to have a buyer at all, that you agree to make all of them. Meanwhile, you have been paying insurance, property taxes, HOA fees and a mortgage during this process. It would have been much less expensive to price the property accurately in the first place.
If you find a buyer to pay an inflated price and that buyer needs financing, you’ll also need to hope the appraiser for the buyer’s lender agrees with your price. Appraisers work strictly with market data and not with emotion. Sellers understandably get attached to their homes and value them more than an objective appraiser. The learn more about pricing your property, you can read our blog post here!
There is so much more to say on this topic, but you can see why we counsel sellers to price to the market. It’s not because we want a quick sale. It’s simply a better strategy.
We hope this post can give you a good idea on how to effectively price your home. To keep up to date with new blog posts, real estate tips, and more, follow us on Instagram here!