We recently went on a couple listing presentations where the sellers were not realistic with their price. Their argument was "we need to get the most out of our house, we aren't going to give it away."
We entirely understand their position, but they need to understand our's as well. We aren't going to list a property that is over priced and will not sell in this market. Remember, our job is to SELL your home, not just list it.
Don't get me wrong, we come prepared to every listing appointment with strong market statistics for the neighborhood where the home is located. At a minimum, we show the seller equivalent properties for:
- Actives to understand their competition - Under contract and pendings, so they have a feel for what price range buyers are looking and if there is any shopping - Solds to see the actual sales price with any sold concessions, i.e., properties used by an appraiser
All these homes are shown with price per finished and total square foot, original list price, and concurrent days on market.
In addition to this information, we also provide the big picture; a) the number of homes in their area that are currently on the market, b) under contract or pending c) solds that aren't necessarily their competition, d) average days on market. We also identify which of these properties are distressed homes. We calculate an absorption rate, which is the number of months it would take to sell the current inventory of properties based on the current solds per month. This gives the sellers an idea of how long they can expect their home to be on the market. All this information allows the seller to understand the market across the board for their area.
Some would argue it is over whelming, but we feel firmly that if a seller is going to jump into this market, they need all the information available to make an educated decision, particularly where they should price their home.
Pricing even a small amount above the competition "to get the most out of our home" can be a huge mistake. If the price of the home is "out of the market" the number of showings for the property will be low. Statistics show that the most activity on a home is in the first three weeks the home is on the market. In order to get back into the market, the property may need to take drastic price reductions.
Additionally, we have learned from practical knowledge as buyer's agents, that homes that are over priced are used to sell the homes that are properly priced. In other words, if you have two comparable properties, the home that is priced reasonably will sell faster because the buyer will see both properties and determine on their own that the seller of the higher priced property is unreasonable and probably will not negotiate down to market value. Remember, market value is the price a buyer will pay for the home.
Another issue with pricing too high, even if you find a buyer willing to pay your price, your property still has to appraise. We have used this strategy successfully for our buyers in the past. They agree to pay the seller's price for the home, but the property doesn't appraise for the sales price, so the seller is forced to come down on their price in order to sell. This strategy does not always work, the buyer must have a top price in mind.
So the bottom line is in order for a seller to price their home to sell they need all the information available to make an informed decision. This is not the time to "test the market" if you truly need to sell.
We entirely understand their position, but they need to understand our's as well. We aren't going to list a property that is over priced and will not sell in this market. Remember, our job is to SELL your home, not just list it.
Don't get me wrong, we come prepared to every listing appointment with strong market statistics for the neighborhood where the home is located. At a minimum, we show the seller equivalent properties for:
- Actives to understand their competition - Under contract and pendings, so they have a feel for what price range buyers are looking and if there is any shopping - Solds to see the actual sales price with any sold concessions, i.e., properties used by an appraiser
All these homes are shown with price per finished and total square foot, original list price, and concurrent days on market.
In addition to this information, we also provide the big picture; a) the number of homes in their area that are currently on the market, b) under contract or pending c) solds that aren't necessarily their competition, d) average days on market. We also identify which of these properties are distressed homes. We calculate an absorption rate, which is the number of months it would take to sell the current inventory of properties based on the current solds per month. This gives the sellers an idea of how long they can expect their home to be on the market. All this information allows the seller to understand the market across the board for their area.
Some would argue it is over whelming, but we feel firmly that if a seller is going to jump into this market, they need all the information available to make an educated decision, particularly where they should price their home.
Pricing even a small amount above the competition "to get the most out of our home" can be a huge mistake. If the price of the home is "out of the market" the number of showings for the property will be low. Statistics show that the most activity on a home is in the first three weeks the home is on the market. In order to get back into the market, the property may need to take drastic price reductions.
Additionally, we have learned from practical knowledge as buyer's agents, that homes that are over priced are used to sell the homes that are properly priced. In other words, if you have two comparable properties, the home that is priced reasonably will sell faster because the buyer will see both properties and determine on their own that the seller of the higher priced property is unreasonable and probably will not negotiate down to market value. Remember, market value is the price a buyer will pay for the home.
Another issue with pricing too high, even if you find a buyer willing to pay your price, your property still has to appraise. We have used this strategy successfully for our buyers in the past. They agree to pay the seller's price for the home, but the property doesn't appraise for the sales price, so the seller is forced to come down on their price in order to sell. This strategy does not always work, the buyer must have a top price in mind.
So the bottom line is in order for a seller to price their home to sell they need all the information available to make an informed decision. This is not the time to "test the market" if you truly need to sell.
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Search the Colorado Springs MLS using the property search tool populated from the Colorado Springs MLS. Request a free market analysis on your home.. This article, Selling A Home In Colorado Springs - Price It Right is released under a creative commons attribution license.
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