‘A tale of two listings’ – Why correct pricing is so important

When you decide to put your home on the market the most important element to get right is pricing.

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A Tale of Two Listings….

JOHN’S HOUSE

John’s house is worth $650,000. Pricing isn’t an exact science but we know what the home next door sold for and we know how John’s house compares. We also know what’s on the market and which homes have sold and which ones have not. We’re confident that John’s house is worth around $650,000.

John tells his agent to list the home at $700,000, “just in case it’s worth more”. 4 weeks pass with little enquiry and no offers. During this time other homes like John’s have been going “under offer”. John’s agent reduces the price to $675,000. Even though the price is more attractive, John’s house has now been on the market for almost 2 months. There’s more and more stock hitting the market every day that buyers flock to, because it’s new and priced correctly. John’s house is now on page 7 in the search results for his suburb on realestate.com.

John finally reduces the price to $650,000 but it’s too late. It ‘s been over 3 months and no one even bothers enquiring about John’s home anymore. All except one buyer. The buyer who’s in no rush and who’s been watching the home month after month. He offers $620,000 knowing that at this stage John is probably happy to see any kind of offer at all. John might accept this low offer or he might not. Either way, this is what the market is now willing to pay for John’s house after all these months

John is not happy.

 

PETER’S HOUSE

Peter’s house is also worth $650,000.

Like John, Peter would love to sell for more than $650,000 but doesn’t want to miss out on any realistic offers. Peter’s house goes to the market calling for Offers Above $629,000. Compared to similar homes in the area, this price is very competitive. Lot’s of buyers enquire about Peter’s house and numerous groups attend the Home Opens within the first few days.

Buyers who are interested in the home see that they have lots of competition. One couple who love Peter’s house simply want to make an offer at the starting price of $629,000 but they realise that if they do they might lose the house to someone who offers more. The other interested buyers think the same, because that’s the reality of the situation. Peter receives multiple offers on his property within the first 3 weeks and his agent is able to negotiate the best of those offers all the way up to $665,000 because of the competition generated by smart pricing.

Peter is happy.

 

It may sound blunt, but every property is ‘worth what it is worth’. Listing it at a higher asking price does not increase its value, it simply deters buyers who may have been interested if it was priced realistically in the first place.

Pricing your property realistically, coupled with an intelligent marketing strategy ensures that you will achieve the highest possible price the market is willing to pay.

If you haven’t already, please ask me for a detailed list of homes similar to yours which have sold recently. Take note of the original asking price, the number of days on market and the actual sale price. Or simply click here to see an example of this data.

You’re always welcome to contact me about any of your real estate needs.

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