How to Determine List Price of a Home

Reblogger Tony and Suzanne Marriott, Associate Brokers
Real Estate Agent with Haven Express @ Keller Williams Arizona Realty BR534744000 & BR540649000

Lee Keadle "with the amount of time and out-of-pocket cost I put into each listing, I don’t want to take on a listing that won’t sell."

Right on target - and - re-blog!

Original content by Lee Keadle

When I work with a seller to determine the list price for her home, I usually give a range instead of a specific amount. It’s usually about a $10,000 range, although it can be larger in the $500K price point. Then I have a lengthy conversation with the seller to explain how I got this list price range, which homes I used as comps (and why), how an appraiser’s value might be different, and how long it’s currently taking to sell a home in this price range and in this community. We talk about the pros and cons of her home and the features that make her house stand out. How is her home similar to the ones currently for sale, and how is it better or less desirable? I find that it’s best to go ahead and talk about these topics because we’re going to revisit the discussion once we start getting showing feedback from buyers’ agents.

Then I ask my seller to choose the list price. Depending on her timing, she might go for the lower end of the range in order to get a quick sale. If her company is relocating her and she needs a quick move, this is a good choice. After all, the lower number on my range is still an aggressive price. I never want to see a seller lose money, especially in a market like ours where prices are going up at a record rate.

If she has several months before she needs to move, she might choose a number at the higher end of the range. This way, there’s no question in her mind later that we tried to get as much money for her home as possible. We try the highest amount possible, knowing that we can always reduce the price if we’re not getting the showings or offers we need. If we end up needing to have price reductions, I generally do these in increments of $1,000 per week so that any buyers registered in our MLS will be notified if the home meets their criteria.

What happens if a seller wants to list her home at a much higher price than the range I suggested? If it’s just a small discrepancy, I’ll probably list the home anyway. However, in the past year I’ve noticed that some sellers get stuck on an exorbitant Zestimate, or perhaps a divorce or previous refi means that they desperately need to get more money from the sale of their house than the market will yield.

Based on my 14+ years of experience selling Charleston real estate, there is no way to convince a seller of the fair market value if she has an unrealistic (higher) price in mind. A Realtor can create the most accurate CMA (comparative market analysis) possible, but no statistics will convince the seller of a realistic price.

In these cases, I usually decline the listing. There are plenty of other agents out there who are so desperate for business that they’ll take any listing at any price. However, with the amount of time and out-of-pocket cost I put into each listing, I don’t want to take on a listing that won’t sell.

The irony is that every time this has happened in the past year, I’ve seen that the home eventually sells for very close to the amount that I suggested. However, it took the seller (and her agent) many price reductions and contract negotiations to get that $30K or $40K off the initial list price. And each time this has happened, I’ve been glad that I didn’t take the listing.

Other Realtors in my office often ask my advice when they’re preparing for a listing. What should the list price be? Do you think that’s too much? Could we get more? Do you know of any upcoming listings that would compete in this neighborhood? What is your home pricing strategy? I get a lot of these questions weekly, so I wanted to explain how I price a home based on my experience.

Lee is one of the top selling Realtors in Charleston SC. His wife and business partner, Katherine, specialize in Mount Pleasant real estate, James Island real estate, and West Ashley real estate!

Lee Keadle

The Keadle Real Estate Group

Carolina One Real Estate in Charleston, SC

www.SearchForCharlestonRealEstate.com

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Rainmaker
3,370,976
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Tony and Suzanne. Lee makes some good points! Enjoy your day!

Sep 30, 2017 05:11 AM #1
Rainer
7,200
Samantha Lorefice
Tierra Antigua Realty - Tucson, AZ
Residential Sales

Very good article by Lee Keadle. I have experienced this many time; sellers who have an unrealistic of their home's value. I do agree that, sometimes, walking away from the listing is the best option. I also like the idea of reducing the price by a small amount in even intervals. I might give this one a try sometime. Thanks for posting this!

Sep 30, 2017 06:53 AM #2
Rainmaker
5,126,192
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Tony and Suzanne Marriott, Associate Brokers good choice for a reblog.... I leave a comment on the original post....

Sep 30, 2017 06:58 AM #3
Rainmaker
4,432,467
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for reblogging the post. I hope others will read it too and learn 

Sep 30, 2017 07:05 AM #4
Rainmaker
4,162,676
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Tony, pricing is key when listing a home, and Lee has done a great job with his post, great reblog!  

Sep 30, 2017 07:07 AM #5
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

He does indeed Wayne Martin and - thanks for stopping by with a comment!

 

Oct 01, 2017 07:05 AM #6
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Agreed Samantha Lorefice and - thanks for stopping by with a comment!

 

Oct 01, 2017 07:05 AM #7
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Thanks Barbara Todaro and - thanks for stopping by with a comment!

 

Oct 01, 2017 07:05 AM #8
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

You're welcome Gita Bantwal and - thanks for stopping by with a comment!

 

Oct 01, 2017 07:06 AM #9
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

It is indeed Joan Cox and - thanks for stopping by with a comment!

 

Oct 01, 2017 07:06 AM #10
Rainer
65,718
Lee Keadle
Carolina One Real Estate - Charleston, SC
Keadle Real Estate Group

Wow Tony and Suzanne Marriott, Associate Brokers - thank you so much for reposting this article.  Last time you reposted one of mine, I was amazed at the number of Follows and views it got.  So know that I appreciate your help very much!

Oct 02, 2017 07:00 AM #11
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

You are most welcome Lee Keadle - thanks for authoring!

Oct 02, 2017 08:01 PM #12
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