The Truth about Pricing Real Estate

The Truth Is ... A real estate consultation is a report prepared by a qualified real estate professional which set forth an analysis of facts and figures, available to the real estate community, to aid the seller in making an intelligent decision regarding the pricing of property.

The Truth Is ... Regardless of the reliability of the data from which the appraised value was extracted, it is the buyer who establishes the value of the property. Yet selling property is not enough. It must be sold with the other specific objectives in mind such as price and time restrictions, and must enjoy proper price positioning in the competitive marketplace.

The Truth Is ... Experimenting in the marketplace with inflated and speculative pricing, theorizing that prices can always be reduced, makes sense at first glance. However, this practice can be counter productive as buyers are sophisticated, and select a property after exhaustive comparison shopping. Since buyers are prone to shop in one range, they recognize value in the specific price range more quickly.

The Truth Is ... The theory of introducing a property at a high price and then waiting for a buyer to make an offer is seldom appropriate. In fact, this thinking explains why certain homes stay on the market for extended periods of time, while many other competitively priced listing are sold in shorter period of time.

The Truth Is ... An overpriced property is less likely to be shown. However, if it is, regrettably it is shown to make other appropriately priced listings more saleable.

The Truth Is ... If a home is priced even 10% over the market value, this in some cases may seriously diminish the number of people who will view the property. Today's increasingly educated and technologically advanced buyers are extremely knowledgeable regarding market value.

The Truth Is ... A real estate consultation should be scheduled to help homeowners arrive at the highest realistic price.

The Truth Is... Many sellers believe that setting an aggressive price on their property is not a problem. If buyers really like a home, they will make an offer.

Truth Is... Real estate professionals have a responsibility to assure the homeowners they represent that their propriety is provided with positive shelf space as compared to the other properties it is competing with.

The Truth Is ... Too high a price can actually end up costing the seller money. A property that lingers on the market may significantly weaken the negotiating position. In most cases, buyers who observe a price reduction, or who note that a property has remained on the market for an extended period of time, usually expect the price to be reduced again. As the length of time on the market increases, so does the difference between the asking price and the listing price.

The Truth Is ... Sellers have frequently been heard to say, "My neighbor, two doors away, has as a home just like mine, and sold it for "x" amount of dollars. I have an extra garage, half bath, etc.; therefore, I know I should get "y" amount of dollars."

The Truth Is ... Comparable properties, especially in the same neighborhood, are strong indicators of a value range. However, over a short period of time, market condition can change dramatically. More or less demand for the property at any given time can significantly alter its value.

The Truth Is ... Sellers are usually not qualified appraisers, as they understandably often misinterpret value, natural tendency to view the value of a home aesthetically rather than objectively.

Truth Is ... When an overpriced home lingers on the market, it is important to objectively determine the contributing factors as to why the home has not sold, therefore, immediately eliminating any form of frustration for owners as well as real estate professionals.

The Truth Is ... No two homes are exactly alike. Adjustments must be made for difference in location, size, condition age, etc. Sellers should be wary of anyone who volunteers price opinions without both physically and thoroughly inspecting the home in addition to analyzing the necessary data which will result in a thorough real estate consultation.

The Truth Is...Sellers very often need to replace or repair roofs, furnaces and driveways, etc., at substantial cost to them. Items such as these are considered routine maintenance and seldom return their costs to the seller. The value of a home is not based on the cost of construction; in other words, the cost not necessarily indicative of value.

The Truth Is... When price reductions become necessary, this action is often viewed negatively by the client because it suggests that something is being taken away. In fact, a proper price adjustment is a very strong positive step in so far as it dramatically enhances the "shelf positioning" of the home by creating more competition to purchase it.  Since something is being given, this is a benefit to the homeowner.