Pricing Your Listing, Selling Your Home

Pricing, it's not a science.. it is an "art."  The medium is constantly changing and the results are looked upon by others who will want to know how you did it, how it made you feel. There is no secret formula, no one answer to the question, "How much do you think I can get for my house?" It's a cooperative effort. The statistics for my company and my personal statistics show that our listings sell for 95 - 98% of their asking price. In what was labeled as a declining market, that's pretty awesome statistics. What does it mean? Our homes are priced well. We are not selling for .75 cents on the dollar as in some areas. We never have here in the Tallahassee area, thanks to well educated Realtors.

So, what about over-priced listings? Should sellers expect their homes to sell in this market?  Should they expect their Realtor to have an idea what it will sell for or in what time frame? Well, certainly! However, they are an integral part of the equation. Choosing a professional who knows how to price is critical for a seller.. and removing the sellers emotions from the "transaction" is essential for the Realtor. There are some universal concepts of listing a home for sale however: 

• Agents who take over-priced listings don't care if your listings sell or not. Is your home an advertisement for your home, or for your agent? You have control over that by pricing it to SELL.
  • Signs in the yard, ads, open houses, etc. all result in nothing more than buyers for the Realtor on overpriced-listings
  • These realtors don't care if your listing ever sells, they are gaining more exposure by the free advertising

• To some agents it is all about competition of "winning the listing", falsely making them look like they won something over other Realtors
  • These agents let the sellers dictate price instead of setting it properly from the beginning, which is the ethical thing to do.
  • The agents also get a reputation for taking overpriced listings with their peers. - That's important in this business.. These are the people they will be working with for 30 - 45 days while a transaction is processing. Being realistic brings respect from other agents while negotiating and throughout the sale.  Top producers are a tight knit group; we don't keep listings around long, and have been known to give them back when sellers are not cooperative or realistic. Greenhorn agents sometimes make mistakes of just getting listings and loose sight of how to "sell" the listing.

• So, how do you set a price?

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  • The real price comes from what the comps show is moving and at what price - many factors are considered from the comps. Studied Realtors will give seller statistics on comparable properties and has studied sales trends. Sellers and Realtors should visit some of their competitive listings to see what their competition looks like.
  • Having a Realtor who thinks outside the box sheds new light on price negotiation as well. Marketing strategies and negotiation abilities should be the real focus of a seller.

• Some agents think they can get seller to reduce a price after a few weeks
  • Price reductions hurt the seller - there is a danger of stigmatizing a property, of creating a "tired" listing, and so buyer's offer even less
  • Remember when Sellers ask their Realtor to cut their commission, consider they may already have by wasting time and advertising dollars while waiting on a listing to sell. How much more will you get from your Realtor by expecting them to burn all their profit. A few of these and Realtors will be out of business!

Remember it is not important what you think your home is "worth", nor what the agent thinks, no 2 appraisals will be the same. Even appraisal standards change with market activity and available comparable sales. There is no exact magical figure in pricing. It is an estimate based on market conditions that change daily! "Market value," the true price your home will bring, is based solely on "what a buyer is willing to pay." It is "an imaginary price, in an imaginary world".

What will a long drawn out listing cost you?  Ultimately, carrying the extra mortgage payments combined with the aggravation of showing a property, keeping it spotless and sometimes taking off work or taking time away from your family is a financial loss that most sellers do not consider before strategically pricing their homes, but they should! Given most home-owner's busy lives, it could be a logistical nightmare!

So, what is your home worth now that you have read this?  Hopefully you have the correct answer to that question without even thinking!  Can I negotiate with a buyer who makes any offer? You betcha!