Home Pricing Strategy for Yorba Linda Homes from a Yorba Linda Realtor
I have learned that there is more than one way to "skin a cat." When it comes to home pricing, there is the old fashioned way, where we find out what homes are selling for in the neighborhood and depending on square footage, # of bedrooms, lot size, exact location, etc, pricing the home to where we, the experts, believe it should be. Sometimes we arrive at this decision on our own. Other times we decide on price as a combined effort with our sellers. Other times, Realtors let the owner decide completely on their own.
Here is what typically happens in today's buyer's market:
Agent meets with home owners as interview to talk about their company, themselves and the goals of their clients. Usually, the agent will pull out the "comps," or comparables that show what homes in the neighborhood are selling for and HAVE sold for. Then, the agent let's them have it --- he or she tells them what he or she thinks the home is worth. One client of mine said, "Nic, what's your magic number?"
Regardless of what the agent says, in most cases the owner has the final say on where to start. (The funny thing is this is part of why the owner has hired us as the expert and professional, but anyhow...) The home is usually priced right where the rest of the homes in the neighborhood are priced.
Ask yourself: What is the problem with this scenario?
The problem is - the homes in the neighborhood HAVEN'T sold!!! There is no way to tell HOW MUCH they will sell for. So pricing the home with the rest of the overpriced listings that have no offers is definitely NOT an effective pricing strategy.
But Nic, we HAVE to net $600K from this deal to get what we want on the next house so we HAVE to sell it for $750K!!!
Then maybe it's not time for you to sell if the rest of the homes in the neighborhood with comparable features are sitting for months and months in the high 7's with no offers. Everyone has their own situation and it's not always feasible or rational to put a home on the market that can't sell for the seller's target price.
A motivated seller (I know let's not let the buyers know your motivated) may start out the listing overpriced, but will continue to drop their price until they hit the MAGICAL PRICE ZONE where the buyers are willing to put in offers. Sadly, they spent months of time getting there. If they have a mortgage, they've just spent 3 more months of mortgage payments AND they've lost tens of thousands in equity.
A Better Way
Price the home BELOW the other homes in the neighborhood. Yes, the neighbors will get upset, but soon you will no longer be neighbors, remember? If you go low enough, you will start a bidding war. I have seen a $335,000 home in Covina sell for $367,000. I have seen a $399,999 home in Placentia sell for $455,000. I have seen a $999,999 home in Irvine have 7 offers and a full price offer accepted in 1 day! (That last example was from personal experience). When you price your home proactively, YOU become the decision-maker, YOU are in control of which offer you accept. And, if you're priced below market, we're seeing multiple offers ABOVE asking price. Forget about waiting around for 3 months, you have people ready to buy your home the FIRST WEEK!!!
But Nic, what if we went TOO low and we could have got MORE???
I have talked to SO many people lately who lament over their greediness of holding out on offers that today would be $100,000 more than what buyers are willing to pay today. As a home seller in this market, you cannot afford to be greedy. Holding out for a little bit better offer is simply NOT worth the gamble.
If you've been thinking of putting your home on the market, and you're really serious about making a move, give me a call and we'll talk about proactive ways to sell your home. Before hiring your next real estate agent, ask yourself this one simple question: Are you hiring this agent to LIST your home or to SELL your home?
Nic Petrossi, Prudential CA Realty (714) 272-3646 Email: email@example.com