HOW IMPORTANT IS THE LIST PRICE OF YOUR HOME ????
TO ANSWER THAT QUESTION I FIRST MUST GO INTO MANY MISLEADING THEORIES THAT SELLER'S HAVE THAT MAY SWAY THEM TO MIS-PRICE (OVER PRICE) THEIR PRODUCT.
1) LIST PRICE VS. SALES PRICE- MANY CONSUMERS SEE WHAT COMPARABLE PROPERTIES HAVE LISTED FOR IN THEIR COMMUNITIES BUT FAIL TO KNOW THE SALES PRICE. THE SALES PRICE SHOULD BE WHAT SELLER'S FOLLOW AND TRACK.
2) PRIDE-WE ALL, AS HOME OWNERS, HAVE A LOT OF PRIDE IN OUR HOMES. (WE SHOULD) MANY TIMES IT IS THIS PRIDE THAT BLINDS US TO BELIEVE THAT WE OWN A SUPERIOR PRODUCT WHEN MOST OF THE TIME IT IS VERY SIMILAR-TO THE COMPETITION. (LOOK AT YOUR HOME AS A PRODUCT, NOT YOUR POSSESSION.
3) THE NEED OF THE SELLER- I CAN GIVE YOU MANY DIFFERENT EXPERIENCES WITH THIS ONE. FOR EXAMPLE, A SELLER HOME IS WORTH 400000 DOLLARS. THE SELLER AND I AGREE THAT THIS IS THE BEST LIST PRICE FOR THE HOME IS 400,000. I ALWAYS HEAR THE SELLER SAYING THEY NEED 420000 TO MOVE AND GET WHERE THEY WANT TO BE. "NICK, I KNOW YOU ARE CORRECT THAT MY HOME IS WORTH 400000 BUT I "NEED" TO SELL IT FOR 420000 BECAUSE WE ARE RELOCATING TO A MORE EXPENSIVE AREA." WHAT A SELLER NEEDS SHOULD NEVER BE CONSIDERED WHEN PRICING A PRODUCT.
4) UPGRADES- MANY SELLER'S FEEL THAT SINCE THEY JUST PUT IN A 25,000.00 POOL IN THE BACK YARD THAT THIS UPGRADE OF 25,000.00 SHOULD BE ADDED TO THE LIST PRICE. SELLER'S NEED TO REALIZE THAT THE POOL OR ANY OTHER UPGRADE THEY PLACE AT THEIR HOME WILL PUSH UP THE LIST PRICE AS MUCH AS IT IS WORTH TO THAT PARTICULAR BUYER. MOST OF THE TIME SELLER'S NEED TO LOOK AT UPGRADES AS BONUSES TO SELLING THEIR HOMES AND OR IT MAY EVEN GIVE THE HOME A DISTINCTIVE COMPETITIVE ADVANTAGE OVER ANOTHER HOME. UPGRADES ALSO NEED TO BE LOOKED AT AS A DEPRECIATION FACTOR. A POOL THAT IS TWO YEARS OLD MAY ADD 10,000.00 TO THE HOME WHILE A TEN YEAR OLD POOL MAY ADD NOTHING.
5) EVERY SITUATION IS DIFFERENT- EVERY HOME IS UNIQUE. THERE MAY BE A GOOD REASON WHY YOUR NEIGHBORS HOME IS WORTH 10,000 DOLLARS MORE THAN YOURS. MOST SELLER'S DO NOT HAVE FULL INFORMATION ABOUT THE HOMES THEY COMPARE TO THEIR OWN. SELLER'S SEEM TO PUSH THE ASSETS OF THEIR HOME AND LIMIT THEIR LIABILITIES BUT DO JUST THE OPPOSITE ON THE COMPETITION.
6) TIMING-IF MY HOME DOSEN'T SELL WE WILL JUST DROP THE PRICE IN A FEW MONTHS- VERY BAD...... A OVER PRICED HOMES SIT. THAT'S A FACT. MANY SELLER'S TELL ME THAT THEY FEEL THE NEED TO LIST THEIR HOMES WITH SOME FLEXIBILITY SO THE BUYER AND SELLER HAVE ROOM TO COME TO A PRICE THAT IS ACCEPTABLE TO BOTH SIDES. IN A BUYER'S MARKET I ONLY LIKE TO LEAVE A 1% MAXIMUM FOR THIS FLEXIBILITY. MANY SELLER'S SAY TO ME IF MY HOME IS WORTH 500,000 LETS JUST TRY 550,000. THE SELLER ALSO INSISTS THAT A BUYER WILL BID 500,000 IF THAT IS WHAT THE HOME IS WORTH.
THIS IS WHERE I ANSWER THE QUESTION "HOW IMPORTANT IS PRICING?". (LIST PRICE)
A SELLER MUST UNDERSTAND THAT PRICING IS THE MOST IMPORTANT TOOL THEY GIVE THE REALTOR IN SELLING THEIR HOME. LET'S GO BACK TO THE 550,000 DOLLARS SELLER THAT THEIR-HOME IS ONLY WORTH 500,000. THE REALTOR/ BROKER WILL BE MARKETING THE HOME TO 550,000 DOLLARS BUYER'S WHO EXPECT A 550,000 DOLLAR HOME NOT A 500,000. IT IS IMPOSSIBLE FOR A REALTOR TO BE SUCCESSFUL IN ADVERTISING TO THE "TARGET MARKET" FOR THIS PRODUCT IF THE PRICING IS INCORRECT. PRICING IS THE BACK BONE FOR THE MARKETING CAMPAIGN. SELLER'S STILL CONTINUE TO STATE THAT THESE 550,000 DOLLAR BUYERS WILL MAKE OFFERS ON THIS 500,000 HOME. MY STATEMENT BACK TO THEM IS "THEY MAY, BUT WE ARE BRINGING THE WRONG BUYER'S TO YOUR HOME AND THESE BUYER'S WILL NOT MAKE THE BEST OFFER'S ON YOUR HOME, ONLY YOUR TARGET MARKET BUYER'S WILL DO THAT."
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