Pricing a home to sell vs. Pricing a home based on pride - TIPS

Pricing a home to sell vs. Pricing a home based on pride

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Just like the used car business, attractive pricing and excellent condition are the two most important factors in pricing a home.  And just like the used car business, there are no two homes that are the same therefore making that distinction between the subject home and the dozens of others is critical.

When a used car is overpriced on the car lot it is quickly ignored by the salespeople and the buying public.   When a house is overpriced the freshness of the home's appeal will be lost after the first two to three weeks of showings. In the car business interest wanes after 21 days and coincidentally in real estate demand and interest wane at the same 3 week period. 

Unlike the car business, one doesn't need to worry about pricing it too low because homes priced below market value often will receive multiple offers, which will then drive up the price to market. Pricing is all about supply and demand. It's part art and part science, and no two agents price property the same way.

Pricing a home based on pride, is like the used car manager having a personal preference for the color blue and therefore pricing all blue cars higher.  Quickly the inventory will be all blue.  When a seller prices the home based on what they bought it for or based on the unique upgrades will typically lead to an "old age unit." Pricing a home on emotion, memories will lead to trouble.

Pricing a home to sell will always provide a great first impression.  In sales, first impressions are everything. Studies have shown that the first two weeks on the market are the most crucial to your success. During these initial days, your home will be exposed to all active buyers. If your price is perceived as too high, you will quickly lose this initial audience and find yourself relying only on the trickle of new buyers entering the market each day. Markets are dynamic, and your price has an expiration date. You have one chance to grab attention. Make sure your pricing helps you stand out on the shelf -- in a positive way.

TIPS when pricing your home to sell:

1) Determine if you really have to sell.  If you want to get the best possible price for your home and the local market is struggling, ask the question "can we sacrifice our housing needs by waiting?"  Another option is renting out your home if the move is inevitable.  If you have plenty of time, do not overprice because you have time. 

2) Recognize housing markets are local.  Just like the car business where typically a 4X4 truck is worth more in the NW versus the south, home prices change from area to area.  In some regions (even as small as some neighborhoods) prices are increasing.  Demand will change depending on the price range and even the neighborhood.   Ask your professional agent: What are the trends? Are prices going up or down - and by how much? How many days are homes staying on the market? If they are on the market longer, how much of that could be seasonal?  In Pullman, the busy season is typically February through July versus in Spokane where it is later. 

3) Who is your competition? What's your competition? Who are the buyers, and why are they shopping? For example, in Pullman the $175,000 to $250,000 price range has a huge competitor in a new development where new homes are going up daily in this price range.  BE SMART!

4) You're the boss - HIRE SMART! Interview your job candidates (REALTORS) by asking questions like ask about the what's the market's "absorption rate", what homes haven't sold and why...

5) Think outside the box and consider strategic pricing. If prices in your area are dropping 1% each month, and you want to sell within the next three months, start with an asking price which deducts the 3% on day 1.  Remember, a competitive price could generate multiple offers which puts you the seller in the "driver's seat."

6) If you are buying another home in a different market or even a different neighborhood - ASSESS that market. The theory of a great buy could definitely offset a situation where you have to sacrifice price on your home which could help on timing for the transition. 

7) Put yourself in the buyer's shoes.  What are the things that you value in a home? Is it a large yard, an updated kitchen or a view? These are likely the same things that your buyer values as well. Talk to your agent about current buyer trends.  Yesterday's orange shag carpet (like the home I grew up in) is today's hardwoods and/or granite.  Your agent should be able to coach you with what the buyer is demanding.

8) React swiftly and decisively. If your home is on the market and is not being shown or if you receive feedback that you are priced too aggressively, don't hesitate to adjust your price.  Unlike wine, home prices don't go up with age.

Pricing a home to sell!  Bottomline, data will set you free. Data is objective.  It tells you the facts.  Emotions have to be put on the back burner if you really want to sell your home.  Pride needs to be put aside.  Get away from the subjective issues and go right to the facts when selling.