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Pricing your Property Right

Pricing your Property RightWhen it comes to selling a home, pricing isn’t everything. Presentation is always highly important. Pricing, however, is where the deal takes on its essential character. Pricing is where the rubber meets the road, and where the women get separated from the girls…

Rule #1 of home pricing is that your home must always be priced competitively. Now, I’ve seen a tendency among people to price high with the intention of negotiating downward. But the problem with that is, if you price too high, the market gets stale. In other words, you’ll find yourself standing around waiting for a sale…while prospective buyers stand around waiting for the price to come down. That’s not a market; that’s a collective daydream.

In truth, the market will always tell you in frank terms what the value of your home is.

Rule #2 of home pricing is to price the home just a little below market value, and sit back and watch the market push you back up. In other words, the low price will serve as a buyer magnet. You’ll not only have many buyers to choose from, but those buyers’ competitive bids will push the home’s price right back up to where the market says it belongs.

Engaging with this process of course requires trust, faith, and patience. Many of my clients resist me pricing low. They’d rather take the deal into their own hands, and slap on a number that makes them feel safe.

But don’t forget: I as a Real Estate professional come in with experience and expertise. I’ve been down all these roads before. Pricing low doesn’t mean you’re stuck! It’s just a strategic way of generating activity.

In a recent sale, my clients’ property had been inherited, and was sitting vacant for years. All those years of stagnation had led to, in my estimation, the need for about $200,000 in repairs. Accordingly, even though other houses in that neighborhood were selling for $800,000 or so, I recommended that they list theirs for $499,000 (“99” always being a powerful symbol of lowness). The clients were beyond resistant. Indeed, they thought I was out of my mind! But in the end, I was able to persuade them.

That super low “$499” brought in a rash of offers, like flies to honey. We’re talking some 30 offers before we could even blink! In the end, we unloaded the property for $632,000 – still low for the neighborhood, but quite high when you considered the home’s condition.

Pricing homes is part science but mostly art. Your Real Estate professional needs to not only have the ability to crunch numbers, but to navigate and anticipate human psychology.

No deal’s outcome can be foreseen. But if you price a deal right, a positive outcome can always be rightfully predicted.