In a word, home sellers, don’t be pressured into underpricing your home when you put it on the market.
At a West Side broker’s sales meeting today, another broker and I were talking about pricing issues after the meeting. Turned out we both felt the same way: Too many sellers are getting pressured into underpricing their homes. Why? It’s mostly because of pressure points pressing in from a weak housing market and bad economy.
First, people are still used to normal market times. Sure, their homes won’t be on the market for as short a time as was the case a few years ago. But two or three months was the norm before that, so why not now?
Second, real estate brokers have gotten knocked around pretty badly by this market, and tend to press sellers into starting at a low price. They point to comps. The point to short sales and foreclosures. They point to bad news. After all, brokers don’t get paid unless and until a house sells.
Understand this: The reason a house doesn’t sell isn’t always price. Sure, we can give our homes away, or take a huge hit and make the sale. But who wants to do that? We’re in a weird market right now with not a lot of supply and not many buyers. To restate: It’s not always price.
I’m advising most of my sellers to get their homes in move-in condition, price it at the high end of the comps, and then sit back and wait. Why price it at the high end? Because they’re likely to get a lowball offer anyway, so they might as well start high. Moreover, if a home is in a good location and is move-in ready, it’s being priced at $369,900 won’t scare off buyers who want to be in the $350,000 range, especially with the current interest rates.
The tradeoff is market time. Sellers may have to steel themselves for a longer wait. A reent client told me, “I don’t care if it’s on the market a year, I’m not giving it away.” Fine by me.
Whether you list with Terradigm or any other firm, feel free to contact us to discuss pricing.
