Think About Buying a Car Before You Price Your House For Sale
October 24, 2007
Now, I didn’t say buy a car. I just said think about it.
Here’s a little piece of advice I give to sellers who are struggling to really hear and internalize the pricing advice I’ve given them. (Because in today’s market, it never fails that my advised listing price is less than the sellers hoped for.)
Think about buying a new car. Or a used car. Whatever. You go online, you do your research. You know that the car you really want to buy should cost about $30,000. Or whatever, use any number you like; I’m using $30k because it’s nice and round and easy and complicated math isn’t my bag.
So you’ve budgeted $30,000 for your new car. You’ve found out – online – that there are 2 dealerships nearby offering the exact car you want. One has listed the car at $35,000. The second dealer listed the same car at $50,000. Being the Age of Internet, you can see all this online, easily, without leaving your Barcalounger or changing out of your favorite plushy jammies.
Which dealer are you going to visit? No kidding Sherlock. You’re going to the dealer who’s offering the product at a mere $5,000 above the market value. You’ll make him an offer at $25,000, he’ll come back at $29,000 and you’ll ink the deal.
The hapless, helpless dealer who advertised his $30,000 product at $50,000? He doesn’t even get a look-see.
This is how it is when you’re pricing your home for sale. Don’t just “try it”. Don’t just “wait and see”. Price it right, from Day One, and you will see the rewards. You’ll be one of the 6% of homesellers who actually sell their homes in Metro Phoenix this year. Insist on overpricing? You might as well spend big bucks on one of those TV ads with the deep booming annoucer voice bellowing “Last Chance!” and “Won’t Last Long!” (because it will last long. And long is painful.)
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October 24, 2007 at 5:39 am
“Let’s just try it for a while and see what happens.”
What happens is that folks think a home with 90 days on the market is worth less than a home that has 9 days… and their offer will reflect it.
Let’s do a test.
There are 2 homes. One had been on the market 5 days. The other has been on the market 5 months. Which one is better?
You have absolutely no evidence of the differences between the two homes except days on the market, and most people will have a much better first impression of the first home over the second.
The price of the second one could have been reduced 5 times and now may be way under market, while the first one may be way over priced.
The price-testers won’t believe this at first but you will get more money if you get it sold in the first 30 days. They will, however, believe it after their home has been on the market for 5 months and at a price that would have flown off the shelf when it first hit the market. Now, that bargain price generates few showings and no offers.
There is a HUGE cost to testing the market in a weak market – tens of thousands of dollars.