The Art of Pricing a Home- Sometimes Less is More
Pricing your home properly for the market place is on of the most is the most important part of marketing your home. Pricing your home properly does several things:
- House sells in less time.
- House that sell in the first 45 days tend to create competition among buyers. Competition creates higher selling price.
- Limits the length of time you have to keep your house in showroom condition.
The following is an example of what a proper pricing strategy can do for you.
UNIT 1- I was asked to market this home in early September 2008. At the time, the most recent sale in the complex was $183,000. This sale was in the prior 6 months. Prior to that the next sale was at the peak of the market in 2005 for $179,900. Other complexes in the area with garages were selling in the $190's Realistically, given the data and the declining market, we could expect to get $172,000-181,000 . The homeowner and I decided to list the property at $187,500 on September 2nd, with expectations of dropping the price in 30-45 days if we needed to.
Proper pricing and marketing secured us an offer in 39 days with closing in 59 days of activation of the listing. Sold in 59 days at $177,000. ($182,000 minus 5000 in seller concessions)
Unit 2- This unit was placed on the market for $196,000, about 2 1/2 months, in June of 2008, before the start of marketing for Unit 1.. Over time the price has dropped to $185,000. They were working pretty much with the same data that I was. In mid-September another unit sold in the complex for $178,000 reconfirming these units would sell in the $170,000 range. At that point unit 2, was on the market for $189,900 and almost 3 months on the market. Unit 2 is still on the market today
On the Market unsold at $184,500
Determining the list price of a home is more of an art than a science. All data pointed to a fair market value range in the $170,000's. For 190k to the low 200k's you could be a sililair unit but with a garage. There are several things going on here.
- Unit 2 did not compete in the $196,000 as it was lacking certain amenities. The buyers are walking through thinking that for the same money they could get a garage. Unit 2 could not compete at that price.
- Unit 2 is not attracting the buyer that are truly in their price range at a fair market value of about 175k to 180k. The target buyer is not being exposed to their home because some one who is in the 170 to 180 range are generally pushing the top of their range and won't look much more than 5% of what they can afford.
- By the time that they lowered the price to a more reasonable range, the buyers were no longer interested. 5 months after closing Unit 1, Unit 2 is still on the market unsold. The market at that point has declined approximately 3% making the fair market value between $169,000 to $176,000.
I can not stress enough how important pricing is in the successful sale of a home. It is the most important piece of getting your home sold. Check out, Price to Sell... or pay the price later.... an article on determining the proper price for your home and Prepare your Home to Sell an article on the 3 P's of selling your home.
I specialize in listing homes in the Merrimack Valley and Southern New Hampshire. I provide accurate data and an honest opinion. I have the experience to help you prepare, price and market your home for a top dollar sale. For your marketing presentation call Kevin at 978-360-0422
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