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Shift: Tactic #7 Pricing Ahead of the Market

By
Real Estate Agent with United Country Ponderosa Realty, Red Feather Lakes, Colorado

In March, I listed a home for $219K, the price was good for the market and there was quite a bit of interest.  

40 days after the listing, the sellers changed their mind and decided they didn't want to sell.

As luck would have it, six months later, they got a job transfer and needed to sell.

We knew that most homes in the area sold for an average of 95% of the list price and the second time around, they decided to price it at $210K.

We were under contract in 2 days! 

 

Note:  Our MLS is reporting the sale took 230 days, because I reactivated the (old) listing. MLS included all the time that it was in "Withdrawn" Status, plus the 40 initial days.

230 days, less 40 days previously on the market, less 188 days in withdrawn status =  2 days!

 

Now that that's clear - YES!!  TWO DAYS!!

 

In any market, the seller does not want to leave money on the table.  Instead of just being thankful for the quick sale, as their agent, I secretly worried that maybe we priced the house too low. Then I read Gary Keller's "Shift" Tactic # 7 and recognized we had applied this tactic without even knowing about it.

 

 

"In a shifting market ....Gary writes, "unless sellers are under pricing it they will end up under selling it.  Time is not on their side...."  This is difficult for some sellers to understand, and much more about correct and strategic pricing is explained in the book.

.

 

 

The average days on the market in my sellers' subdivision is 208 days or almost 7 months. 

I hate to think what would have happened if they had moved with that job transfer and still were paying their mortgage and other costs here for seven months!

By knowing which way the market was heading and the speed of the market, we were able to price this listing ahead of the market and get the property sold.  Instead of the average 95% of listing price, we received 98%!

 

 "Shift statistics" show that if you list high, even with future price reductions you "find yourself chasing the market downward, losing the margin you would have gained by pricing it right in the first place."

This graph is similar to one in the book, and there are several others that provide additional insight.

  

You can order your copy of "Shift" here, and read Tactic # 7, Price ahead of the market- Seller Pricing Strategies. 

Pricing ahead of the market works in a Seller's Market as well as in a Buyer's Market!   

I wish you all success in this shifting market!  Be sure that your home is priced ahead of the market and get the book "Shift" to learn more about this pricing strategy, I know you will be glad that you did.

************************************************************************************

Mary Douglas, your Mountain Broker-Associate and REALTOR®

United Country  Ponderosa Realty, Red Feather Lakes, CO

www.redfeatherlakes.com ---800-531-2195

"A Day in the Mountains will always soothe your city soul"

The information contained in Mary's blog is deemed reliable but is not guaranteed, and the opinions and        views expressed in these articles are solely those of the author.

_________________________________________

avoid foreclosure: call the Colorado Foreclosure Hotline 1-877-601-HOPE

HOTLINE WEBSITE: ColoradoForeclosureHotline.org

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Website: www.marydouglas-redfeatherlakes.net

 

 Dear Readers, who are not members of Active Rain. If this post does not accept outside comments, it is only to avoid unwanted spam -

Please feel free to email me any time, I appreciate hearing from you!

 

Would you like to know more about the Livermore/Red Feather Lakes area?  Want more exposure for your home or property?  More exposure for your business or event? Let me know, I'm always looking for blog topics and I love to showcase my listings on Active Rain!

 

Browse through all the Colorado listings or focus in on some wonderful mountain properties in Livermore or Red Feather Lakes!  

 

I'd appreciate the opportunity to work with you - Don't forget to ask for Mary!

                                

Donate to the American Red Cross to help those in need. The Red Cross helped so many in Colorado that were affected by wildfires and floods.

    

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Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi Mary,

Great job! It is all about timing, staging and pricing. I'm sure your sellers are escatic with your services. Way to go Mary!!

Dec 27, 2009 12:00 AM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Nice transition into the book report (book review). When I wrote about the book, I felt like I was back in school. You really did a great job with the sellers you described above!

Dec 27, 2009 01:30 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Toula, Thank you for stopping by today, I wish I could take all the credit, but the sellers also did a great job of thinking it through, too. Together, we got it done.  I hope you have a wonderful New Year too Toula!

 

Hi Paula,  You're right!  That's exactly how I read this chapter - slighlty below the market.  If you're "in" it, people do not notice your listing as quickly. I think you wrote this chapter, Paula!  LOL!! Thank you for stoppiing by today!

 

Hi Tammy, Good question!  I was on vacation when they called, all the information was current (except price) so I changed the status to Active. -- I didn't know MLS would count the days as they did. 

I told the sellers when I got back I would take new photos of the green grass exterior- but we were already under contract by the time I got back! Thanks for asking, I'll be interested to know what you think about the book, Tammy.

 

Hi Jane, That is too kind, there are days when I feel like a newly hatched chick!  HAHAHA  Thank you for stopping by, I appreciate that!

 

Hi Caren, Thank you !!  I think this concept will help sellers become sellers, instead of people with a sign in their yard :-)  Good luck to you, the book is much more informative than this post!!

 

Hi Dorie, You're right - timing, staging and pricing! I think they were happy with the sale, they were able to move on to their new area with no worries.  Thank you Dorie, I appreciate your thoughts on it!

 

Hi Melissa, I felt like I was writing a book report too, until I decided to throw in personal experience - then it didn't seem quite so awkward.  I liked your post.  I've only read a handful out of the hundred or more that have been written.  Thanks for coming by Melissa, I appreciate it!

 

Dec 27, 2009 02:06 AM
Lisa VonBargen
Photography7522 - Estes Park, CO
Estes Park Real Estate Photographer

Hi Mary! I just had a tough conversation with a seller who decided not to sell and now is having second thoughts. Now, the price we should list it at is less than he paid for it not all that long ago and it really may be in his best interest to rent the property for awhile. At least he has data that will help him make whatever decision is best for him.

Hope you have a wonderful 2010 on the other side of the mountain! (I started to type "over the hill" but that didn't seem appropriate...)

Dec 27, 2009 03:02 AM
Not a real person
San Diego, CA

That's interesting that you can reactivate a listing that was so old.

Happy New Year!

Dec 27, 2009 03:22 AM
Rich Cederberg
eXp Realty - Albuquerque, NM
eXp Realty Agent Albuquerque

Mary,

This is one of the better posts I've seen about "Shift" so far.

I'm glad you were on top of proper pricing already. My opinion of this whole 'shift' frenzy is that it's about 3 years too late! Indeed, the book was published in late summer 2008 and was written in reaction to the already changed market in many areas.

I don't want to seem mean, and it is a good book, but those who haven't aready shifted have probably left the business.

 

Dec 27, 2009 03:57 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Russel,

Knowing what I know now, I would re-enter all the information and create a new listing.  I sure didn't realize that all those days would be counted.  The "change in status" items come up on the hotsheets though, so the reactivated listing showed up right away and luckily the selling agent jumped on it!  Thanks for stopping by, I appreciate it :-)

Dec 27, 2009 04:01 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hey Rich, I don't think that's mean at all, you are right, those who haven't shifted might have already left the business.  I got into this crazy business only in 2008 -what was I thinking? LOL!  I think it's a good guide to help us help our clients in shifting when they are in the wrong gear.  I appreciate your honest feedback and thoughts on it Rich, thank you!

Dec 27, 2009 04:14 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Lisa, At least you had that tough conversation - some sellers are better off waiting to sell, if that's an option for them.  I had to laugh, at "over the hill" Lisa, thanks for changing that! LOL!!  I hope you have a wonderful New Year on the other side of the mountain, too!  Remember, we'll have to meet at Wilbur's in the valley sometime in 2010!! :-)

Dec 27, 2009 05:13 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I seem to be attracting a lot of listings from sellers who are real estate agents lately. One of them even told me she knew she was chasing the market down when she listed with a discount agent but did it anyway. Then she wanted to argue with me over the price I suggested. Needless to say, that's not a listing I decided to take. I mean, I'll take overpriced listings for other reasons, especially if eventually I feel the seller will be realistic, but in this situation, it just wasn't going to work. I guess you can be too close to the situation.

Dec 27, 2009 06:02 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Elizabeth, if real estate agents are calling you for their own homes, they know you know the market...why would they then argue with you??!!  It's a bitter pill to swallow for some sellers these days, isn't it?  Thanks for stopping by today, Elizabeth!  I appreciate it.

Dec 27, 2009 06:15 AM
Shirley Parks
Sands Realty 210-414-0966 - San Antonio, TX
Broker, 210-414-0966, San Antonio TX Real Estate

Interesting post regarding The Shift, Mary.  I didn't enter because I have had too much going on but I enjoy reading the entries, especially yours! :o)

Dec 27, 2009 08:07 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Mary- in our MLS system (and it may work in yours I don't know) we can re-activate and change the listed date to prevent that.  You'll have to give it a try with a listing and see if it works.  I found out quite by accident when I put the date of contract in the wrong place once.  But it was a good lesson to learn.

Dec 27, 2009 10:54 AM
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Mary, Chasing the market is never prudent.  When listing a property we must always consider the carrying costs of hanging on to the property for too long (especially when the seller has had to relocate already).  We see so many in our area chasing the market.  And sellers end us selling for much less than market value when they do eventually get a buyer.  Your sellers are fortunate to have a knowledgeable real professional representing them.

Dec 27, 2009 11:04 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Thank you Shirley, I appreciate you stopping by today.  I hope your "too much going on" will settle down for you soon and be "just enough" :-)

 

Hi Tammy, I checked, I don't see how I can change the listing date, or even copy my old information into a new listing.  I'm going to ask Tammy Drake about that, she's with Iresis - our MLS provider and is on AR.  Maybe she can help if I ever need to reactivate again!

 

Hi Sandy, You said it so very well, chasing the market is never prudent!  I appreciate your thoughts  and can tell you have a good handle on the subject!  These sellers were great to work with - we managed to come up with a good plan together!  Thanks Sandy, I'm glad you stopped in.

Dec 27, 2009 12:21 PM
Sheldon Neal
Bergen County, NJ - RE/MAX Real Estate Limited - Maywood, NJ
That British Agent Bergen County NJ

Oh it's SOOO frustrating chasing the market !

I had one particular listing that I tried desperately to get the seller to take the large plunge to 'catch up' but alas - we kept chasing the market. Eventually we sold (almost a yr later) but for much less than they would probably have got if they priced more appropriately from the start !

Great focus point from the Shift approach Mary !

Cheers :o)

Dec 27, 2009 01:43 PM
Ann Hayden 636-399-7544
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Des Peres, MO
SelectAnn.com

Mary,

I am sure you have a very good idea of correct pricing...

Ann Hayden in Wildwood, MO

Dec 27, 2009 01:55 PM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Sheldon!  Your story is a great example of what can happen and how long chasing the market can take - not to mention less money to boot :-)  how frustrating for you when they don't heed your advice! Thanks for stopping in Sheldon, I appreciate your input!

 

Hi Ann, I have a good idea of correct pricing - still, I think it is one of the most challenging things about listing a property.  After reading this Chapter, I think I can convey ideas better to a seller. I appreciate your kind words and you stopping by tonight, thanks Ann.

Dec 27, 2009 03:03 PM
Team Honeycutt
Allen Tate - Concord, NC

Thats a nice tactic I am trying hard to price all of my listings at a price that will sell!

Jan 13, 2010 04:30 AM
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Shelton? is that you??  I think that's the only way to do it - otherwise, you have to keep adjusting and chasing the market.  Thank you for stopping by today, I appreciate it.  Happy selling!

Jan 13, 2010 05:17 AM
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