The Price is Right!
Published on 11/20/18 by Michael Moore
When selling a property, it is paramount to use the right strategy when fixing the asking price. If the right approach is not taken, it can mean leaving the property on the market too long, which is the main concern. Hardly ever will someone price their home far too low, thus leaving money on the table. The only time I've ever heard of a seller intentionally under pricing a property way too much was when they were selling it to a family member, or a good friend. In these instances, they did not use an agent; probably because they knew the agent would flip out and try to convince them otherwise. To each their own. If a seller wants to do that, they have all the right in the world to do so. It can create a small problem with comps though. When an agent has to justify the price they are recommending to a seller, they have to toss out the abnormally low ones, even though they may have otherwise been a perfect comp. This comp problem can happen on the high side too. Once in a while a buyer defies the market and just has to have a certain property, even though it is well overpriced, whether they are trying to outbid another buyer or not. Again, agents have to explain away that comp to sellers so they do not get their hearts set on an unrealistic price.
Back to the main point! Pricing the property according to its location and condition and allowing it to sell sooner than later will save a lot of frustration and usually save money as well. Every property has a buyer - at the right price. This is where trusting an experienced agent really comes in.
A seller typically knows their property best, but they cannot always be objective about the sales price. There is too much nostalgia attached, or sometimes they really need to get a certain amount for their property because they owe money in other places. When an agent recommends a lower price than the seller wants, they can get offended or believe the agent does not know what they are talking about. Enough agents will go ahead and agree to put the property on the market at a higher than recommended price, with the agreement that if the property gets no offers in the first week or two, then the agent's price will take effect with a price correction. Sometimes it is multiple corrections in smaller increments. The problem is, after a month or more, no one is paying attention to the property anymore - until it hits that magic number and attracts that one buyer who is always out there.Yet, when the property finds that magic number, it can sometimes mean the number winds up lower than if the right price had been affixed in the first place.
Also, overpricing a property can cost money since many are still paying a mortgage and taxes- and they may have already bought another property. In a different post, I will go over some of the psychology and nuances of fixing the right price to let a property move sooner than later verses erring on the high side and waiting on the buyers to beat the price back down.
When I work with you, I will use my experience and balanced approach to help you put the right price on your property, creating a win-win situation for everyone. I look forward to having that chance soon.