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Real Estate Opinions - Is it the Pricing or the Marketing?

Real Estate Opinions - What's more important, Pricing the home properly or the marketing? Yes, I understand the majority of people will say it's a combination of both, but that's not my question.

real estate opinion marketing If you could only do one thing for a listing, would you price it properly and aggressively from day one or would you market the heck out of it and hope for the best?

I've recently run into two different situations with sellers who have their homes on the market. They're both using two different strategies, or at least their agents are.

The first one has had the house on the market for 11 months. He is using an agent who works exclusively in his gated community. He says they have had 67 showings on the house and never hear anything about feedback. He says the agent doesn't think it's a good idea to reduce the price because they're not getting feedback that it's overpriced, and he just wants an offer, any offer, so he can have a starting place with negotiations.

Since the agent is exclusive to this community and is a member of the country club there, he's assuming she has a lot of marketing in place that is supposed to just make people write an offer... but 67 showings and 11 months later, nothing, nada, zilch.

The second one has had the house on the market just over 2 months. How many price adjustments has she had?? FOUR!

The first thing I saw is that the original asking price was $4. This is so when a consumer is looking at properties, they can't tell what the true original asking price is or was so when the agent makes adjustments, the consumer doesn't know where the number actually started... until their buyer's agent looks at the history.

This house was listed for $475,000 on 8/12. Reduced substantially to $430,000 on 8/22. A buyer should think, "WOW! This seller is serious, I wanna buy it!" However, further history shows the seller bought it less than a year ago for only $410k.

On 9/4, the price was reduced to $420k, and further reduced to $415k on 10/7 and then $400,000 on 10/16.

As far as I can see, I can't see any marketing on this house. It seems the agent is feeding off the builders' traffic as she has done a couple of open houses and put a balloon on her sign that blows in the wind. The house is now priced lower than what the seller bought it for, but still no nibbles...

So, is it the marketing that gets people to write offers or is it the pricing strategy of lowering the price aggressively every few days that will make people write the offer? If seller number two had an agent that aggressively marketed the house as "barely lived in and better than new" and did some target marketing, would they have more bites? If she started out with the $430k price instead of the pie in the sky at $475k, would they have more bites?

If seller number one priced the home better to show buyers he was a serious seller, instead of letting it sit on the market for 11 months waiting, would he have already received the offer he was looking for in the price range he's willing to accept?

Two very different ideas of selling a house, yet both houses are yielding the same results, no offers!!

I'll ask again... if you were only allowed to use one strategy to sell a house, which would you choose, pricing or marketing?

It's a hard decision, I know. But think back to one of your hardest listings to sell and if you had to do it all over again on that particular house, which would you choose?

**Are You Packed Yet?**

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.com
Donna@DonnaHomes.com

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way.

For real time Austin TX listings, click here.

** #1 Agent in my Office for all of 2008 **

Copyright© 2009 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* Real Estate Opinions - Is it the Pricing or the Marketing? * was first published on donnahomesblog.com

Posted by Donna Harris, REALTOR® & ASP - Hill Country Austin Lakeway Homes on 10/21/2009 10:21 AM

Comments (75)

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Originally posted at: Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Real Estate Opinions - Is it the Pricing or the Marketing?

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75 Comments on Real Estate Opinions - Is it the Pricing or the Marketing?

OCT

Donna:

Congratulations on having over 550 thousand points. Kudos's to you. As to which side of the fence I would be on ---price. I understand that one seller got 67 showing, I feel that speaks volume --- it might mean that the agent needs to use better follow-up.

Donna -

Great Info I liked your examples. As for me it was much more sucessful to market it then to just price it well. The fact that people went to see the house was a win. So from what I have seen is Marketing first Pricing second, if a buyer really likes the place they will decide by making an off how much they're willing to pay.

Thanks!!!

-Phil Graves-

utahbuyeragent.com

utahbuyeragent.com logo

Hi Donna,

I'm one of those NEED BOTH people, but if I had to choose one, I'd price it right! A home priced right will sell much faster and is already linked up to a lot of marketing avenues just going in the MLS. It's sure to catch someoneseye if it is priced aggressively and buyers have been doing their research, more so than a beautiful home that's way over priced, but marketed to the hilt. You have to worry about the appraisal when you price high and only worry about marketing, pricing it with the market helps eliminate that issue from the start.

Sincerely,

Kathleen

Donna, I'd price it right because all the marketing in the world isn't going to drive potential buyers to your listing if they aren't even searching in the price range in the first place. Great post.

At first I thought price. Then I remembered I sold a 285k for 345k to an out of state cash buyer.....the buyers agent didnt seem to care, obviously! I used awesome aireal photography and several other avenues to promote the home!

Without a doubt.....pricing. Of course it helps that we do other marketing as well. But my opinion is that any property will sell if the price is right or low enough to overcome any other obstacles.

Hi Donna ~ Pricing trumps all I think. The best example in my area is a property that has been in at least a dozen - maybe 20 or more - newspapers and magazines. And yet since the sellers never were realistic on price I think it has been for sale off and on for several years. It's always stood out to me as the perfect example of how the very best exposure will not sell an overpriced property.

Liz

Hi Donna, If forced to choose one or the other price has to win. Even the worst property will sell if priced correctly.

Price. Do REOs or Short Sales have great marketing? Most don't, but the ones that sell do because of the price mostly.

You left out a critical variable: condition.

Competitive price + condition (home staging, redesign and even renovations) = SOLD. Marketing or no marketing.

Hi Donna, PRICE! Around here, if it's priced right it will sell in less than 40 days. As we all know, when you keep reducing, you end up getting less than if it was priced right to begin with. If the market says it's too high, it's not going to sell and will hardly have any showings. Great post!

I'm on the pricing band wagon...buyers want a deal!

After seeing what I have seen in the last two years, price. You will get multiple offers and you have your CHOICE of what you can accept (something that will close) rather than one offer that you will do anything (and have more to lose from it!)

Price always is the dominant consideration to a buyer in their decision over anything else.

Scenario number one proves it... price. The sad thing is here that on both of these cases either the seller is driving the decisions and ignoring the agent, or the agent does not have a clue. neither work well! Again, price, because price is the only thing that will over come all objections.

I personally think that both combined together will ensure that your listing will sell. But if you had one choise and one choise only, then I think that price would be more important. The mls on it's own can do a good part of the marketing automatically.

Jean Richer
Ottawa, ON

Pricing. It's always price! A real estate agent's marketing prowess is greatly overstated.

Price! A lesson learned the hard way.

And actually, over-pricing, not marketing, seem to be at issue in both examples. If example #2 was priced right to begin with, it would likely have seen better results . . . and it will be interesting to see how long it sits at its current price before finding a buyer. (Maybe you can update us on how the two do in the next weeks / months.)

pricing is more important I feel than marketing. In the metro Detroit area our mls gets the word out to most sites on the internet

If you have not priced it right, the marketing is useless since you are telling the world that you are selling an over-priced property. With enough money I could advertise my listings on the GoodYear blimp. But if that property is a mobile home and I put $1,000,000 on it, the home will not sell. First you have to get the price right, then tell the public what that correct price is. Market a bad price, and you are likely going nowhere. However, many many agents are trying to do just that today. Their sellers are wondering why no one is calling, and the agents are wasting their scarce advertising funds.

Hi Donna. It depends on the market but based on what you wrote and what you described pricing is a very important factor... more so than marketing. If it is not priced to sell then all of the marketing one does will mostly likely result in a property that sits on the market for months if not years. ~ Lana

Donna ~ It will always be price in my book. Liz hits the nail on the head when she says overpriced homes don't generally sell, no matter how well marketed they are. (There are obviously exceptions to that rule, but who can tell up front whether they are the exception? Risky to say the least).

On the other hand, you don't get a second chance to make a first impression, so price reductions are a poor substitute for pricing it right in the beginning.Your second case is a good example of that.

So you see, I would choose pricing (it right) every time.

Denise

Price, price, price will always be my vote. Price compensates for everything.

Price to sell, market to sell faster and possibly for more money. In our market, priced wrong it simply WILL NOT SELL. Marketed badly, it will take longer to sell, and will sell for less than if it had been marketed well. And of course "Marketing" is a bit of a catch all. Absolutely no marketing effort would imply no MLS exposure, no signs, no photos, and dirty dishes on the couch (sorry, sofa?) :) Price is table stakes - marketing differentiates your results from another Agent or a private seller - faster & for more money.

In your examples - both houses were overpriced. I know it - and I haven't even been there!

Interesting post!

No amount of marketing can yield a buyer for an overpriced listing. And if you price it well, even with no marketing, you will get buyers coming through. That's my take!

Price is always the most important piece of the puzzle... price it right and it will sell...

Price. An agent just reduced the price on her first-ever listing and was altering the flyer. She asked me if she should add: Price Reduced.
No. No need to, the price will do the talking.

That's easy. Price.

Linda Metallo, Re/max Impact, Lockport, Il.

Any house will sell for the right price - therefore, if I had only one way to market a listing, it would be price.

Donna -

Price. Price. Price. Price. Price, Price. Price. Price. Price. Price. Price. And a totally great question to ponder.

Michael

Donna -

Good question. I am going to come down on the side of price. I've always been of the mindset that it is all about supply and demand. Price is directly related to supply and demand, whereas marketing isn't.

There's a saying that if you keep doing what you've been doing, you will keep getting the same old results.

The house that did not sell after 11 months and 67 showings and no offer is SCREAMING overpriced! The second house with the four price reductions in rapid succession wastes everybody's time and energy. The buyers who might have been interested at the now lower price are probably long gone. I think it is the National Board of Realtors who has the statistics that the most showings occur in the first 2-4 weeks a house is on the market. I think that the house needs to be priced right for the condition of the house and for the location of the house. Thus pricing is the most important over marketing. If the price is attractive enough, the buyer will find you! Think garage sale principle here buyers have been known to s how up at garage sales before they are even open.

It would depend on the house. If it is one of scores in the neighborhood, then it would be price. The traffic will come to the neighborhood... and it will find the low price. If the house is unique, it would need to be marketed to find that "right" buyer.

Donna,

You know that only three things sell a house: price, condition and location. I have seen agents take a listing and never even take a picture of the inside of the house and yet it sol. How do I know? I was the agent who listed it first and did everything to make it sell including going to the house and teaching the college students who were renting it how to use a vacuum. After my listing expired the husband (divorce situation) gave it to another agent and he never even took a picture of the inside so I can only assume he didn't go inside. It took another 9 months to sell the house and at a substantially lower price than the original list price. As far as I can tell there was no marketing, no open houses none of the things that I did and yet it sold. What made the difference? The price!

I could go both ways, but my gut says marketing. I know most people say price. However, the internet has changed the landscape of real estate. It provides limitless capacities to market a property. Having it priced right is important, but without marketing, who will know about it? Creative marketing (if done correctly) can help justify a price and/or compel a buyer to get off the fence and make an offer. At the end of the day, the right price will get the home sold. But I still think that a precise market plan (a combination of traditional, internet, social media, viral, etc) can broadcast that listing to the masses in a matter of hours. That is powerful.

On another social website a Realtor gave an analogy using a $100 bill asking "would you pay $110 for this $100 bill" I guess we all know what the answer is. No matter how suave and sophisticated a marketing plan is you can't consistently (oh, you'll find a few that will) sell a $100 bill for $110.

So it is with pricing property. If it ain't priced right it won't sell. And guess what? You'll get all the blame.

Price is king. if it isn't priced right and marketed enormously, It is just like shouting "I am priced too high" louder than normal.

Priced right ... the first time! And that is so hard to get a seller to do. Marketing the heck out of it (and I've done it) only matters if it gets results--and there's usually a price adjustment vs. final price anyway.

Donna, great question. I don't believe you can have a sell without both price and marketing. However, I will choose price with at least decent photography. Thanks for allowing us to sound off.

Price. I love to market my listings, but the bottom line is the price, I agree with Bill on the $100 bill. And I am going to borrow that line from him.

Donna:

A few years ago all an agent had to do was put the listing in the MLS and it would sell. The market attracted agents who never actually learned how to properly market a home. They were drunk with the luck they were having and thought that this was easy!!! It's not that way now. A good agent needs to know how to stage, take pictures, blog, syndicate, set up virtual tour among other things. Marketing a home also includes pricing. If an agent doesn't know how to correctly price a home they don't understand marketing. If I can't get the price I want, I turn down the listing. I market to expired listings and many have learned the pricing lesson and I work with them. If they haven't they become someone else's problem, not mine.

Hi Donna... I vote for pricing, but pricing it correctly from day 1, not "testing the market" and then chasing it down. Chasing the market down just make sellers look desperate... and then we get the low-ball bargain buyers instead of the serious ones.

Certainly you HAVE to price the house right. No matter how you market it, no one will come see a house that is clearly over priced. Thats too bad that the agent priced it so high to begin with. Wasted time!

As James Carville would say, "It's the price,..." As others have already said, all the marketing in the world won't matter if the price isn't right.

Donna, compelling topic and conversation. As Lane says, "If the house is unique, it would need to be marketed to find that "right" buyer." That would be my listing. Then again, without the right price, even the "right" buyer may not buy because the house is overpriced. Great post.

OCT

If I had just one choice it would be price. Fortunately we always have the ability to use both choices. I will not take an overpriced lsiting.

Pricing - no question. Buyers don't look at only one home, They look at several and choose the best value. Being the best value is much more important than spending more/unnecessary money on marketing.

I agree you need both, but if I had to choose I would pick price. One example I heard that makes sense is that if you were selling a gallon of milk for $10, it wouldn't matter how many commercials you ran, newspaper ads, or billboards you had, if your competitor is selling the same thing for $5, consumers will go for the lower price.

In a strong SELLER'S MARKET - Marketing is King.

In today's BUYER'S MARKET - Price is King.

I'm also one that would say both but if I had to pick one it would absolutely be price. In example 1, 67 showings, wow. I'd say the marketing is definitely working to get people in there, but no offers in 67 showings? Somethings wrong.

Price is the single most important part of the package in my view. However, you have to time the market. Is the market going up or down? When does the client want to sell. Do they have the time to wait for the increased price that a rising market will provide?

My strategy this past Spring was to price fairly high and wait for a couple of months for the market to catch up. That happened, and vendors were very happy.

Pricing.

After watching builders for years offer Realtor brunches, free upgrades, trips for Realtors, free upgrades, nice financing, free upgrades and finally HUUUGE price chops, it was obvious that these brand new properties-in pristine condition- absent a big base price drop, wouldn't sell. Big bucks to offer great marketing; no result if the price wasn't right.

Donna,

Great post. I particularly love how you pointed out the situation with showings. As I instruct all sellers, marketing and advertising is designed to get showings. Showings is what gets properties sold. It is hard to be believe that there were 67 showings and no feedback. The feedback is the an extremely important component to getting the property sold. In terms of price, it's my feeling to price it right the first time although it can certainly be a challenge to do so today. It sounds as though in the second scenario in terms of price, it doesn't matter what the price is because it is not being advertised effectively (or at all). You can have the best product in the world, but if no one knows about it . . . doesn't happen.

It's a balance between the two in terms of price and marketing. Priced right + effective marketing advertised to the widest possible buyer audience = showings => Offers => SOLD is the formula I work.

In today's market, the price is more important, in my opinion. If the home is overpriced, all the marketing in the world won't sell it. And even if that perfect buyer came along, the home would still have to appraise out, which is getting tougher and tougher in today's market.

I am a Purple Cow person. Marketing can only go along with a great product, so I would say both, but it starts with pricing.

Donna, WOW! you've gotten a vast array of answers. Here's my two cents worth. If it's way overpriced no amount of marketing will make it sell. If it's in MLS anywhere, it's all over the internet if buyer's look and in today's world, most of them are more computer savvy than we are, so they're all marketed to a certain extent. (Well, unless they're FISBOS or listed with a non-REALTOR licensee) Anyway, price it RIGHT!

Great description of each scenario Donna. Thank goodness as top professionals we don't have to choose one OR the other. We get to offer BOTH to our clients. We know what it takes to sell in this market, both. If the client doesn't want to be realistic in pricing then we can let another agent spend their time and money attempting to sell.

Let's price it right and then hopefully we won't have to market it!

I'm one that prefers both, but with 90% of buyers starting their home search on the internet and most of those using a Realtor, marketing is the thing that can be tossed out the window if need be. There is so much national syndication off of local MLS systems that internet marketing is automatic.

I'm a firm believer that no matter how well a home is marketed, if it's overpriced, it's not going to sell. This is why I've always said not to take an overpriced listing. Let the other agent over-price it and spend their money marketing it. When it expires, I'll come in - price it right and sell it.

Bar none, pricing. If an agent is too slack to properly market they can always fall back on their fellow agents to pick it up in MLS and sell it to one of the 95% of buyers who are represented. I'd rather do ALL the work representing a buyer on a properly priced property than be compelled to have my client be the one to teach an unrealistic seller what his agent should have taught him in the beginning!

WOW! I turn my back for a few hours, and have tons of people to respond to. Please be patient and I'll get to everyone!!

Lorraine & Loretta, Thank you, and yes, the agent definitely needs better follow up, but the sellers don't want to ruffle feathers and ask.

Phil, I see where you're coming from, but what if the overpricing is out of the buyer's price range and the agents aren't even pulling it up in their search in order to get a lower offer?

Kathleen, Makes sense.

Susan, Exactly!

Greg, That's awesome!

Bryant, I agree!

Liz, Yikes!

Knowles, Makes sense.

Chris, I hadn't thought about the foreclosures getting no marketing and selling quickly.

Jackie, Except in this case, lots of showings, but not even a lowball to play the game.

Linda L, Thanks!

Renee, Makes sense.

Gary W, Definitely.

Corinne, The seller with the 67 showings is solely listening to his agent and she's making all the decisions. That scares me, but he doesn't seem to mind.

Jean, You make a point about the MLS.

Aaron, Yep, and Good seeing you here on AR!

Trent, I know, right?

Russ, Thanks.

John E, I like the mobile home at $1M example.

Lana, Makes sense.

Denise, Thank you!

Cheryl, Thanks!

Bruce, I'm not including the MLS as marketing as that's not a marketing "effort".

Loreena, Thanks!

Debra L, Exactly!

Sara, Good for you!

Linda M, Simple!

Susanne, Thank you.

Michael, I'm sorry, but I didn't understand your answer... ;)

Joel, Makes perfect sense!

Beverly, I'm not even in their market, and I heard "overpriced" as soon as they told me how many showings they have had, which was a few hours before I learned it had been on the market for almost a year!

Lane, You make a very good point about unique homes needing more than just price.

Sybil, Drastic example, and it happens all the time.

Will, You make a good arguement. There were no real right or wrong answers. JUst wanted to see what others thought. I have an extensive marketing package, but I also won't overprice a listing...

David, I love those commercials for the $1 coins for $20. Why pay $20 for only $1? ANd they're never minted in the US so it's not real money anyway...

J Philip, With a megaphone.

Michelle, Exactly!

Denise, I'll let that slide...

Virginia, Glad you learned something new to help.

Carol, A lot of my business last year was from expired listings! They're usually more willing to price right this round.

Steve, Make sense.

John, I know!

William, Thank you!

Carin, Goes around in circles doesn't it...

Dave, Me neither!

Marc, Makes sense.

Kevin & Monica, Except the HEB down the street consistantly sells milk for $3.99 when it's $2.99 down the street at Randall's... Why? I don't know, but it's only $1.99 in Dallas so even the $2.99 really makes me mad!! HEB has brainwashed Austin, and it's annoying because their prices are so much higher than what I'm used to!

Tim & Susan, I'll let you have two different answers...

Mike M, Personally, I think the agent is getting people in the door and showing them higher priced homes since this one is at the bottom of the neighborhood, but the sellers don't see it yet. I think I opened their eyes to ask more questions.

Brian, Interesting strategy...

Dave E, Straight to the point.

Options, Builders should be giving the incentives to the buyers not the agents, but that's a different story.

Kathleen West, THanks, but you didn't choose just one...

Stephanie, I know, right?

Joe, Somehow purple cows sell mattresses!

Marian, Gotcha!

Debra & Raymond, But you didn't choose just one...

Deborah A, Great plan!

Tori, Great plan, makes sense!

Sarah G, Exactly!!

Marisa, Thanks!

PRICE by all means! I too would prefer both, but as Tori noted, many potential buyers are searching the internet with easy access to MLS databases, so pricing a property correctly is what will draw their attention. In addition, follow up, follow up, follow up when a property is shown. Client feedback is one of the best sources of determining if a property is priced correctly.

I would say if it is not priced properly you could spend thousands on marketing and it still would not sell.

Mercedes, Yes, feedback is very important.

Richard, Exactly!

Donna - In my opinion if a home is priced right it will sell, so I my choice would be pricing over marketing.

Absolutely PRICE over marketing, especially in this market!

My feeling is that if a house is priced correctly, it will sell.

Great view

OCT

Michelle, Great!

Kim, Right!

Sharon, Makes sense.

Darrell, THanks!

OCT

As a huge proponent of Internet marketing, I would tell you that price combined with aggressive marketing always prevails for you and your seller. I know you wanted to hear which one works best, but I think every situation is different. When it comes to price, I firmly believe the way you market the price is crucial. Example: If a homes market value is around $102,000, I would price it a $100,000, instead of the common $99,900... I get so much more activity out of the MLS and internet when I price this way... You have to understand how buyers search for homes... and the market activity in different price ranges. Once you get into a new price bracket, it can make the world of difference. Moreover, when you market the home aggressively you will see more buyers calling you direct and you will see more conversions to other properties you may have... Lastly, price it right from the beginning and you will beat the average days on market. Remember, Price beats all objections!

OCT

Bob, Thank you for spelling out how you work it.

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