Pricing a House To Sell

Simply stated, every property has a price at which it will sell.  That has always been true.  The irony is this:  if you price it too low, you may not need a REALTOR® to assist you (sometimes a low price actually scares buyers away); if you price it too high, I may not be able to help you.  Finding the balance is necessary to maximize your proceeds.

Unfortunately, selling Real Estate is not so simple.  Sellers and buyers often have quite different ideas about what a property is “worth”.  The mortgage appraiser may have their own idea.  Let’s look at this logically.

First, in order to sell any property, we have to assume that “ready, willing and able” buyers can actually find it.  From my experience, many listings that do not sell or that sit on the market for a long period of time were doomed from the start.  They need a new perspective as something is minimizing or actually preventing the possibility of a sale.    For example, a “For Sale” sign and a great price do not always work.  Your location may not receive a lot of traffic.  If buyers cannot find your property in the MLS or online the price is meaningless.  The fact is that whatever that “something” is must be identified and overcome.  The alternative is to remain on the market longer than necessary, perhaps more than once, and/ or take one or more price reductions that only lower your proceeds and make buyers wonder if something is wrong with your property.  The answer could be marketing.  I have written a separate article on that topic.

Second, unless you have a unique property that has no real competition/ comparables, buyers are going to be very well informed about the market, pricing and the “value” of what you are selling.  When there is a lot of inventory, buyers will generally NOT look at what they consider to be “over-priced” properties.  That perception could be false if your house has been poorly marketed.  The key is to know your market and price accordingly.  Price is the “lure” to get people in:  buyers are very objective about what they expect to find and are willing to pay.  Having a high asking price and hoping to negotiate is very risky and possibly wastes both your time and your money.  If you plan to buy something else this is even more important.

Third, you need to monitor the activity level (showings, offers) and respond accordingly.  Is the goal to sell or to be on the market?  If you are not getting showings you may have a marketing or a price issue.  The same can be said when there are a number of showings and no offers or low offers.  Examine what is happening rather than simply lowering the price but, whatever you do, think about what the market is “telling you” and take action.

Fourth, price reductions should serve a purpose and should NEVER happen unless you are convinced that poor marketing is not the real problem.  I do NOT want to see my clients throw away their money but sometimes a lower price is THE answer.  Lowering the price can either make your house more attractive to the present market (if you are that close to what buyers expect to pay you would have gotten an offer already) OR it can re-position your house so that it gets “noticed” by buyers really looking for what you have.  I have a theory on “price bracketing” and would be happy to discuss it with you.