Pricing Strategies
Real Estate Update with Cheryl Marlow
770 KKOB AM’s Residential Real Estate Specialist!
According to Psychology Today, behavioral economists are putting the blame on sellers as to why their homes aren’t making it to the closing table. And of course many sellers are blaming the agents. Now whether or not I agree with that is not the issue at hand. The issue is that buyers don’t want to pay what sellers want to sell for. Many sellers are remembering what their house might have sold for before the housing bubble burst and in today’s market those prices simply aren’t realistic. That would’ve – should’ve price compared to today’s prices feel like a loss to sellers. When faced with that possible loss, sellers would rather take their chances and overprice their home in today’s market in some faint hope that a buyer will come along and pay that unrealistic price and that can cause some major frustrations for buyers, sellers and agents alike!
In all reality, pricing has to reflect what the market will bear, not necessarily what the seller wants or needs to net. First off, it needs to be based off of an accurate comparative market analysis or CMA. CMAs tell you what Comparable homes in your area are selling for. Your asking price really should be within 5-10% of the average sold price of the comparables. Also, it’s important to elicit the use of an experienced agent, like myself of course. Both the seller and the agent must have the same goal, which is to get your house sold for top dollar in today’s world. When your agent recommends a price adjustment it’s not because they don’t like your home or because they don’t feel like it’s worth more, it’s because the market has indicated, based on showing activity and feedback, that the price needs to be readjusted.
Once prices are reduced, you really will start to see sales happen! I just sold a home where the seller was reluctant to adjust the price regardless of what the market was demanding. The sellers had spent $40,000 in upgrades and they were trying to get that money back out of the home. Quite frankly, in today’s market the buyers just aren’t willing to pay for these kinds of things. After 5 months the sellers finally decided that their motivation to move outweighed their attachment to the home and they reduced to my recommended price and we were able to sell the house the very next week. It’s important to remember that even though segments of our market have improved, others are still struggling and we continue to be in a price war and a beauty contest and probably will be for some time!
Cheryl Marlow
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