How NOT to Price Your Home

Reblogger Vickie McCartney
Real Estate Agent with Maverick Realty

J Philip from activerain has written one fine post about how NOT to price your home.  Sellers need to read and take heed....

Original content by J. Philip Faranda License # 49FA1074963

How not to price your home:

  1. Take your mortgage balance.
  2. Add your credit cards.
  3. Throw in your cars.
  4. Add a generous portion of all the money you borrowed from relatives. 
  5. Pile on your down payment for that other house you have your eye on.
  6. Last but not least, give yourself an extra 50 grand just for being you. 
  7. Get a blank look on your face when you are told that the buying public doesn't care what you owe. 
  8. Wait.
  9. Wait some more. 
  10. Decide you'll stay after all. 
Here's a better plan:
  1. Find out what homes like your have sold for in the past 90 days
  2. Price the house at that number or 5% less. 
  3. As my son's teacher says "you get what you get and you don't get upset."
  4. Pack your bags.
The buying public is utterly ambivalent about what you owe to whom as it relates to pricing your property. They only care about their own needs. What you need isn't on their radar, and if you aren't priced in line with the current perception of value, your listing will get stale and sit unsold for months as you chase the market. 

Chasing the market is always being one price point behind what the public is willing to pay. You enter the market at $599,000 when you really ought to be at $549,900. You lower to $575 when the market for the house is $525,000. By the time you hit $499,000, it could be a year later and the public isn't willing to pay more than $450,000. Each price drop seems harsh, but your real enemy was starting out too high. 

Sellers are in a war of attrition with buyers who lurk before they call, call before they look, and look at everything before they buy. You won't get a call, look or offer until your price conforms to what the public deems fair. The only offers overpriced homes get is low ball offers from bold types who wouldn't pay as much as fair minded people would on a fairly priced home. The only way to win the battle is to price as aggressively as possible and not allow your ego or personal preferences to cloud your objectivity. 
Easier said than done!

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J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester Putnam MLS. Read my short sale bog here. J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City. 
Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

     Follow J. Philip Faranda on Twitter   Search the MLS Just Like an Agent!  40 Somethings Group on Active Rain

 

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Rainmaker
108,711
Cathy McAlister
Cathy Ashley McAlister, GRI CDPE - Broker / Sacramento - Sacramento, CA
Sacramento DRE#00648507

Crystal clear information Vicky.   #4 & #6 seem to come up quite often.

Dec 28, 2009 02:23 PM #15
Rainmaker
314,512
Monique Combs
Royal Shell Real Estate - Bonita Springs, FL
Royal Shell Real Estate - Monique Combs

Vicky ~ How about when they take a second with all the equilty and totally forget and think they are taking a loss later...Great post

Dec 28, 2009 11:08 PM #16
Rainmaker
131,694
Michele Reneau
Certified Staging Professional (CSP) Elite Instructor - Summerville, SC
Realtor, GRI ~ Charleston, SC Relocation Experts Team

Vicky-I always hate to see sellers chase the market despite my visual analogy of a falling water bottle. It is easier to catch it from above or below?  They waste valuable time and dollars by not pricing it right in the first place.

Dec 29, 2009 09:36 PM #17
Rainmaker
1,116,534
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

It must be reverse psychology night here at ActiveRain. Yours is the third or fourth "how not to" post I've read tonight.

Happy New Year!

Dec 30, 2009 12:51 PM #18
Rainmaker
314,512
Monique Combs
Royal Shell Real Estate - Bonita Springs, FL
Royal Shell Real Estate - Monique Combs

Vickie ~ grea re-blog from J. Philip Real Estate LLC Briarcliff Manor, NY: I re-blogged this I believe last week. Happy New Year!

Jan 01, 2010 12:06 PM #19
Rainer
104,398
Frank Kliewer
Woodinville, WA

The advice is well put Vickie. I find it is usually an educational process for the sellers.

Jan 04, 2010 01:40 PM #20
Rainer
478,183
Not a real person
San Diego, CA

Hey, Vickie - Just stopped by to see how you're doing. Hope all is well with you and yours, that you're really busy, but that you'll soon be back to Play in the Rain with us for 2010.

Happy New Year!

Jan 06, 2010 01:08 PM #21
Rainer
115,542
Renee L. Norton
Birmingham, AL

Thanks for the re-blog.  Wonderful tips...I wish all sellers would listen!

Jan 08, 2010 04:35 AM #22
Rainmaker
712,050
Christopher Watters
Watters International Realty - Austin, TX
Austin Realtor (512-829-8000)

Vickie - Loved the article.. So it seems like 30% of the listings I don't get.. It's because they want to be able to use the equity in their home  to pay off credit cards, past due bills, etc (equity that is non-existent of course). I have to tell them unfortunately a buyer doesn't care about your past due bills and credit card balances. They just want to get a home at a fair price!

Jan 16, 2010 12:33 PM #23
Rainmaker
449,868
Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Christopher~  It just goes to show you that you have to know when to walk away!  Thanks for stopping by! 

Jan 16, 2010 02:27 PM #24
Rainer
204,707
Jane Cross
Homes By Cross serving Charlotte NC Real Estate Needs - Charlotte, NC

Vickie, Very clever and funny reblog...glad  you shared it!

Jan 27, 2010 05:07 AM #25
Rainmaker
1,173,247
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Thanks for reblogging this, Vickie. It is hysterical.

Jan 28, 2010 03:37 PM #26
Rainmaker
1,036,653
Kathy Clulow
RE/MAX All-Stars Realty Inc. Brokerage - Uxbridge, ON
Trusted For Experience - Respected For Results

Vickie - My preference would be to deal only with the better plan type of seller but we do get our share of the how not to's

Feb 01, 2010 06:34 AM #27
Rainer
129,121
Deena Cottingham
GreenApple Staging & Images, Calgary Staging & Photography - Calgary, AB
Home Stager & Photographer

Thanks for re-blogging -- too funny! I've seen this happen in my neighborhood. 6 months later . . . the home is still for sale. Now he'll have to up the price to cover the carrying costs that he's out!

Feb 07, 2010 11:55 AM #28
Rainmaker
1,331,635
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Vickie, it's amazing how sellers will do just exactly what you say they shouldn't when trying to price their home.  The seller is often their own worst enemy. 

Feb 11, 2010 06:37 AM #29
Rainmaker
642,606
Dawn A Fabiszak
Private Label Realty ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Vickie~  I have encountered this unfortuately.  It's painful when they just don't get it.  HELLO? 

Feb 18, 2010 01:26 AM #30
Rainer
273,383
Irene Tron
Valparaiso, IN

Very funny but sad at the same time because that first list seems to be what so many sellers want to use. 

Feb 21, 2010 12:59 PM #31
Rainer
204,707
Jane Cross
Homes By Cross serving Charlotte NC Real Estate Needs - Charlotte, NC

Vicki, I like the teacher's saying 'you get what you get and don't get upset' very catchy.

Mar 04, 2010 01:04 AM #32
Rainer
321,367
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

The buying public also doesn't care for more than ten or fifteen seconds about all the problems you are having that are forcing you to sell your home.

May 20, 2010 08:55 PM #33
Rainmaker
236,392
Debbie Summers
Charles Rutenberg Realty - New Smyrna Beach, FL

Vickie - I couldn't even make it past #1 without going "YEAH"...  Great advice, especially in today's market.  

Jun 24, 2010 12:09 AM #34
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Rainmaker
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Vickie McCartney

Broker, Real Estate Agent Owensboro KY
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