Pricing listing these days can be very tricky. The old guidelines have changed to some extent. It was easier in the "old" market when homes were appreciating rapidly. You would look at the most recent comps of other sold properties; take that information and try and interpret value from there. If you were wrong and priced too high, in some cases, the market might catch up. If you were right and priced closer to the best price, it would be under contract in a matter of weeks with a happy Seller and a happy Buyer. I used to be about pushing the price up to stay ahead.   

 

These days values are holding strong in our market, but when pricing you have to stand out in the crowd of rising inventory. The market is currently very sensitive to price and if you're too high your listing will hear crickets from day one. It's tough because we have a smaller pool of buyers out there in the hunt and rising inventory....so how do you know what is and what is not the right price? Here is a list of some things that I think about when pricing:

  • The one of the old rules for showings was "10 showings and no offers; reduce the price" now I believe the number for that rule of thumb should be reduced to five. Prices need to stay ahead of the market. Showings have to speak louder.
  • Price it right from the start. Some agents will give you a higher "best guess estimate" in order to get the listing and will bank on price reductions in order to get it to sell...not good. Listing these days need to be price right from the starting gate so that they stand out and get the attention that they need in order to sell.
  • Another rule of thumb is "one month and no showings; reduce the price". One month in this market and no showings. Ask yourself, "do I really need to sell now?" if the answer is yes, then reduce the price substantially. Foot traffic is key to any home selling.  
  • You have to price for market and not need. Some Sellers will say “I need to make $X amount of money in order to make this amount” which creates a very weak pricing strategy. Buyers don’t care how much Sellers profit, just like Sellers don’t care how much Buyers pay. It is a market and you have to pay attention to what is going on around the market place.
  • Think how much time on the market costs (mortgage payments, HOA dues, taxes and utilities) and keep the absorption rate for your neighborhood in mind. The absorption rate = number of listings vs. number of sold over a period of time to determine how long, in months, it would take for the current inventory to be sold at the current rate.