How to Price Your Home To Sell in Today's Real Estate Market
This is incredible advice! It is important to expose your property to as many buyers as possible. That means having the price hit as many brackets in an MLS or Internet search as possible. For instance, if you price a home at $200,000 your property will in appear in two searches. The first being those looking for homes priced from $175,000-$200,000 and the second being those searching from $200,000 to $225,000. Of course the search criteria may differ but you should position yourself to potentially gain twice as many potential buyers. As a Realtor, it is never easy to ask for a price reduction. We do want you to get as much money as possible from the sale of your home. Your best interest is always in the front of our minds. That being said, if it is not showing and you are not recieving any offers one of two things are a problem, price or condition. Listen closely to your chosen Real Estate professional we arm ourselves with statistics, education and various other tools in order to be the best we can be. After all, you hired us to sell your properties not just list them!
How to Price Your Home To Sell in Today's Real Estate Market
Recently I've faced the dreaded "price reduction" conversation with a few sellers who's homes have not yet sold. Since price positioning is everything in this market - from initial pricing to price reductions - I believe that it's important to have open and honest discussions with sellers before listing their home for sale and then again at least every 30 days. More often if there's no traffic, i.e., the house isn't being shown.
While preparing an analysis in advance of a "price reduction" discussion with a seller who's home was priced just above $400,000 in Annapolis, Maryland, I had an "aha moment". I realized that how a seller priced their home could determine if it was on the first page of a home search or on the last page - and that it could matter!!!
Let's say a seller is thinking about reducing the price of their home to around $400,000 or for that matter considering what the initial price should be before listing the home for sale. An analysis of active listings and their distribution could help a seller determine the best position when compared to their competition. A quick check of the number of active listings in Anne Arundel County in our MRIS (our MLS) today (June 3, 2010) revealed the following:
- There were 11 active listings between $400,000 and $401,000
- There were 81 active listings between $399,000 and $399,999
It might seem like initially pricing or reducing price to $399,900 instead of $400,000 could be best. We're told that the leading digit - in this case 3 vs. 4 - is important. Price positioned at $399,900, the home would be competing with 7 times as many properties. If a consumer sorted the list of homes by price from lowest to highest (which is what consumers will often do), they might have to look at 81 homes before they found this seller's home. Whereas price positioning at $400,000 a consumer might only only look at 11 homes before they found it.
So instead of taking a "$29.95" approach to pricing a $400,000 home, a price position one or two hundred or one or two thousand dollars over or under $400,000 could mean the difference between lots of competition or no competition at all. Sellers that are in front of current real estate market trends will get their home sold in the shortest time and for the most money. Whether initially pricing or reducing price, selecting the very best price position is always important.
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Stephen Howell and Rocky (his lab-mix from the SPCA of Anne Arundel County in Annapolis) now live in Winter's Chase at Riva Trace in Annapolis, Maryland. He works in the Annapolis real estate market. His website lets people search the Washington and Baltimore metropolitan area MLS. Buyers can also search for waterfront homes along the Chesapeake Bay. His website has current real estate data on Annapolis, Anne Arundel County, and Maryland.
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