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(English) How to Price Real Estate

(English) How to Price Real Estate

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2 comentarios
  1. Bill Silver
    Bill Silver Dice:

    Ashley,
    I agree with most of what you said, but do have some thoughts that are somewhat different.

    I sell on Cape Cod, and here the #1 factor that determines the value of a house is proximity to water. Identical houses may sell for $400K in one location, $800K closer to the water, $1,8Mil if they are water view, and $3.6Mil if they are on the water.

    Presentation (think staging) and promotion (think marketing) are also significant indicators in what a house will sell for and especially how fast it will sell.

    There are only two mistakes that sellers can make when deciding on what price to list their house: Too HIGH — or Too LOW. So the seller’s strategy also must be factored into the price. Nothing is easier than getting multiple offers on a house in a few days. Just price the house so low that it is a deal that buyers can’t refuse. And, sometimes that is the right thing to do for a seller. But, especially on Cape Cod, many sellers don’t need to sell their house quickly, they can wait, they can rent. They will sell if they can get a price they like, but they don’t want to sell at a fire sale price. Each seller is different.

    I show sellers how competitive their house will be at different price points — all the way from 3 days to maybe never (I use a List Price Positioning Sheet). Sellers always GET IT, and can then make informed decisions.

    If they choose to go with a price on the higher side, then pre-agreed-upon price reductions are always something to try to get. My data shows that about 90% of all houses are under agreement within 60-90 days of their LAST PRICE (which may be the original price). What this means is that if a house has been on the market longer than this time frame then the odds of it selling at the current price are NOT ZERO but NOT GOOD either. When prices are going DOWN, then their odds really are zero.

    But, contrary to the widely held opinion that a house that has been on the market a long time will have a hard time being sold, what is really the case is that once the price is reduced (at least 2.5%) then the clock resets and the 60-90 countdown starts over. How long the house has been on the market overall is much less relevant.

    Anyway, that’s my experience.

    Responder
  2. John Sheldon
    John Sheldon Dice:

    Well, certainly great article and good response. However, I’d also like to add my two cents here.

    As I often say, real estate is an extremely local business and where I am right now, if anything is priced right and it’s in good condition, it gets an offer almost immediately. And, sometimes, brokers are suggesting that people don’t overprice their property by 3%-5% but underprice their property by 3%-5% because that creates a bidding war. And I’ve seen it over and over again. Now, once again, it’s a very local business and I’m talking about the market right now in the past few months in Portland, Oregon.

    Thanks very much.

    Responder

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