Setting Your Listing Price
It happens every day. A Realtor meets with a client to discuss the selling and marketing of the home. Many topics are covered, but it is almost always the setting of the listing price that seems to be the sticking point these days. Many sellers are convinced that the house is worth more and therefore will sell for more than the suggested listing price being presented.
I've spent a lot of time thinking about this. When I am hired to sell a property, I want to do so successfully for my seller. And I want to get my seller the most money that is possible. But getting the most money possible for a home in today's market isn't the same as it used to be. Back in 04-07, sellers could pretty much set their listing price and demand it. We had a strong seller's market in those days with lots of buyers. Demand was high and so were prices.
But the market shifted when the housing crisis hit our country. We all know about how the bottom dropped out of the market, but many of us are still having problems when it comes to the reality of what that means if we want to sell our house. Simply put, the market determines what price the house will sell for. We can be mad about it. We can lose sleep over it. We can cuss it up one wall and down the other. But the reality is, we can't change it. The market is what it is.
We can be mad about it.
We can lose sleep over it.
We can cuss it up one wall and down the other.
But the reality is, we can't change it.
The market is what it is.
As a Realtor, the number one thing I face today is convincing my sellers that they have to set their listing price appropriately. The typical response is, "Well, we can always lower it later if it doesn't sell." I'm no analyst, but I think that the reason so many people struggle with setting the listing price is because we're romantic driven optimists at heart. We always think we can do better, get more, strike gold or maybe just get lucky. Too often, we think selling houses is like a game. But we forget that it isn't what we think the house is worth that will sell it, it's what the market will bear. It's what someone will pay. And quite frankly, buyers know that market is down and they know when a house is priced too high. You wouldn't buy something that was overpriced either, would you? I wouldn't...not unless it was a front row center stage ticket to see the Eagles in concert. But remember, that's only one ticket I'm buying. That's the only seat in that spot and only one person can sit there and it's gonna be pricey because it is the only one. Even then, I've still got a price I won't go over! Your house and my house aren't like that concert seat. We're just one of many that buyers can choose from.
If you are considering selling your home, can I give you some tips for setting your listing price?
1. Please listen to your Realtor, especially if they are telling you real numbers based on real time data. Unless you're one of the lucky few, you are probably going to be hearing a listing price that is less than what you had in mind. And the listing price being discussed should be coming from data taken from your local MLS within the last 6 months.
2. Setting the listing price appropriately will get you more money at the end of the day as opposed to setting the listing price high and then chasing the market down. A fast sell is what you should be after today because it is only when you are sitting at the closing table that your payments, utilities, daily interest, insurance and other expenses will cease. All that stuff will continue to accumulate every day your house sits there waiting for someone to buy it at your higher listing price. That is costing you money.
3. Ask your Realtor how many houses have sold in your listing price range and square footage over the last six months. That number divided by the number of houses on the maket will give you a pretty good real picture of your odds at selling your home. The higher you go in listing price, the less chance you have of selling, when compared to other like properties.
4. Finally, get in the car with your Realtor and go tour the competition. Simply put, there is no better way to understand the market. Think of this like buying a car. When you buy a car what do you do? You usually go try out a couple of different makes and models for comparison sake. You should do the same thing as a home seller. Pretend you are the buyer, then go look at what is your neighborhood or town. When you look at the market from a buyer's point of view, it should help you to be very realistic in setting your listing price.
In conclusion, if you are trying to sell your house today, you can do it. But you've got to get real serious real fast about your list price and what it's going to take to move that house. You may have to take a loss, but even then, you can take less of a loss if you'll price the home to move quickly!
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Information and content in this blog is original to Bob Haywood.
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Bob Haywood
Tulsa, OK Realtor®/ McGraw Realtors
Bob@BobHaywood.com
(918) 272-7272
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