Am I Facing Reality?

By
Real Estate Agent with The Gibsons at eXp Realty
Well at the beginning of the month I beat up on sellers telling them that they must face reality. I must soften that a bit and admit that saying that is easier than doing it. I understand that pricing a house that has been your home is not only a business decision, but also an emotional/personal one. So when the market stats and the advice of a professional real estate agent should be the pricing gauge, you find you have to fight an overwhelming drive. The urge to let other factors influence your home pricing. Factors such as how much you owe, how much money you need to move to your next house, how much money you put into improvements, and more. None of this will cause your house to sell for more than a buyer will pay.

You would think as an investor, I would not be susceptible to these things. I should be looking at this from a purely business perspective. I am trying, but I am struggling. The problem my husband and I have is that if we go much lower we will have lost money on this house that we so carefully remodeled to resell. Ouch.

I ran the numbers, I looked at the comparable properties and I still think compared to other homes it is priced well. But in the small town it is in, it is entirely possible that the whole town is overpriced. Other homes have also lowered there price, but with none selling.

As Jeffrey Otteau of Otteau Valuation Group, Inc in East Brunswick, NJ says, one of the "undesirable effects of Over Pricing is that marketing time becomes extended, which serves to delay the sale, eliminates all sense of urgency and will eventually lead to price reductions." Otteau offers workshops for real estate professionals with market forecasts and other helpful topics.

I have heard this from Jeffrey a number of times, and my broker has coached me. I know that the best way to price a house is what Jeffrey Otteau calls "right pricing". You set you price lower than the competition and you will end up with a faster sale and a higher price. It is tough to swallow, but studies show it to be true.

So did I practice what I preached? Not too well. What will I do? I will make another price reduction on Monday. Check back here for the closing party when I sell it.
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Rainmaker
94,583
Roger Stensland
Keller Williams Realty Puget Sound - Maple Valley, WA
Let's Move!
When working with buyers and sellers, we have to be able to read our clients so we can tailor our approach to them to be the one that is most effective in communicating with them.  That way, we will get better results.
May 12, 2007 03:17 PM #1
Rainer
33,546
Stephen Gladstone
Stonehollow Fine Home Inspections & Testing - Stamford, CT

Sometimes sweetening the deal can help effect buyers...

Washer dryer will remain upon successful closing, swingsets, grills, pool tables, kennels, garage refrigerators and window treatments are oft taken and then not used at the next home...

new buyers often just need to feel the deal has been sweetened to take the plunge...

tickets to disney have been known to close the deal...

Steve Gladstone, ASHI Certified Inspector in CT

May 20, 2007 06:03 AM #2
Rainmaker
22,809
Theresa "Tracy" Gibson
The Gibsons at eXp Realty - Matawan, NJ
Your Needs Served

I wanted to update this.

The listing expired in July unsold.  I changed my agent affiliation to Keller Williams and relisted the house this month.  I lowered the price after 2 weeks of no showings.  We will likely make another price reduction next week, because we have still had no showings.

This is a small town, for New Jersey, only 377 homes and a high priced town to boot.  There are only 2 houses priced under $600,000 mine and one other much smaller.

The house is totally renovated and professionally staged.  Instant showings with a lockbox.  Home is not occupied.

Any words of wisdom are appreciated.

Nov 26, 2007 09:06 AM #3
Ambassador
1,890,246
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth
Practicing what you preach is somewhat difficult in the real world with the emotions of sellers Tracy. Sometimes there just are not enough buyers to go around and then pricing and CONDITION become very important, of course along with location.
Nov 26, 2007 09:10 AM #4
Rainmaker
22,809
Theresa "Tracy" Gibson
The Gibsons at eXp Realty - Matawan, NJ
Your Needs Served

Thanks Gary.

Although I am sure there is some emotion, like not wanted to have put all the time, effort, and money into renovating this home to resell at a profit only to end up losing thousands of dollars by having to sell it for much less than I anticipated and eat up my profit with holding costs.  LOL.  That kind of emotion.  But not the same kind as when it was my home.  I never lived there.

I think I will be like Scarlett O'Hara today.  "...Well I won't think about this now. I'll think about it tomorrow."  Or in the case of my next price reduction, I will think about it next week.

Tracy

Nov 26, 2007 09:27 AM #5
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Rainmaker
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Theresa "Tracy" Gibson

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