Price Reduction news - so what does it all mean for YOU the seller and agents?
Great advice from a fellow agent when pricing your home...
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Price Reduction news - so what does it all mean for YOU the seller and your agents?
I was astounded when I read the Price reduction news this morning. I was astounded because I know so many agents try their hardest to price homes correctly, only to have a seller demand a higher listing price. Some agents will walk away, knowing that their price is right, not wanting to align themselves with an unsuccessful sale attempt.
Other agents agree to the higher list price, only with a pre-signed price reduction, in the event that the only sound heard around the home are “crickets” chirping. I used to use this tactic myself, and I recommend it both for sellers and their agents. Simply put, you agree to disagree and place a limit on your losses. The first two weeks are so important for a successful sale of your home. Often the buyers that walked through those first two weeks will be the ones who come back 90 days later, after your 3rd price cut, to make a deal. So if you don’t correct your price immediately, you will likely end ,in a slippery slope, chasing the market down.
Why go through that?
The sales price is controlled by the market. There is a misconception that agents control listing price, or ultimately, the sales price. This price does not occur until after the sale. There is no way to forecast exactly what it will be, and you won’t know until the day you sign the offer letter. Your initial asking price is as important as your location.
Don’t chase the market down. If your city has an average 10% decrease in price, then you may want to consider a 15-20% cut to stay ahead of the trend. Too often sellers play catch-up, only adjusting the price down when it is too late and the vicious cycle continues. Situations like your neighbor asking $25K less than you, and selling within a week for the same price you are going to ask a month later, need to be avoided.
Fear. That is the number one reason people don’t price correctly – let me let you all in on a big secret. If you price your home for $1 and put it on the market tomorrow, the demand will be so high, and the offers will compete so much, that eventually you may get more than you actually expected just because of the demand and competition. $1 may be a little drastic, but I hope you get the point.
Gain the position. The position you want as a seller is CHOOSING an offer, not waiting for one. Work with your agent to see what listings you are competing with and price accordingly. Price yourself under the market and watch buyers come in fast – or learn the truth you don’t want to hear, “you should go off the market and wait”. News abounds about multiple offers coming in on aggressively priced homes.
Sellers – look at this report understand what it means for your market.
Agents – use this report to articulate to your sellers how important pricing right is, and how they need to avoid chasing the market down.
Charts are available for download at: http://bit.ly/4EQCNB
Original Post: http://www.trulia.com/blog/pierre_calzadilla/2009/08/price_reduction_news_-_s
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