Dear Sue,
My real estate agent keeps suggesting that I lower the price of my home. I know that my price may be a little high but I think if a buyer really wants my home he will make an offer. I need room to negotiate.
My friends agree with me. My best friend just sold his house. He said he priced his home a little high but he ended up getting what he wanted.
I think it is just common sense and good negotiating strategy to price your property higher than your bottom line.
What do you think, Sue?
— Savvy Sam
Dear Sam,
There are different strategies for different markets. When markets are trending down, over pricing can be disastrous.
Thinking that one should price their home above the market in order to have negotiating room is a mistake. If one prices their home too high in a declining market the price that a buyer is willing to pay sinks lower and lower.
Consider the following statistics furnished by the Placer County Association of Realtors.
There were 2,195 home sales in Placer County in the last six months. Out of those sales, 1011 were on the market for 30 days or less. That is more than 46 percent! Those sales received 99 percent of their asking price. In other words, the sale price was reduced by 1 percent of the asking price.
There were 385 Properties sold within 31 to 60 days. Those properties sold at 96.5 percent of the asking price or 4.5 percent less. Another 241 properties sold in 61 to 90 days. Those sold within 95.9 percent or almost 6 percent less than the asking price.
There were 190 properties sold within 91 to 120 days for 94.2 percent of the asking price, or over 6 percent less.
Then there was 368 properties on the market for 120 or more days sold at 93.72 percent of asking price, or 6.25 percent less.
While there are always exceptions, I cannot stress enough the importance of pricing your property to sell when it’s first put on the market. As the statistics show, the longer time on the market equals the less money one ultimately receives.
The primary reason is that distressed property sales have dominated the market driving prices downward. Placer County real estate is currently losing about 2 percent per month in value. While sales may be up prices are down.
Buyers rule. Placer County presently has approximately 2,300 properties available for sale. Buyers are not making quick decisions because they have several choices and they fear that they may pay too much.
Buyers that are looking are always watching for new listings. That is why all new listings have the most showings in the first three weeks. Once that “golden window” is closed sellers have to rely on new buyers coming into the market noticing a listing for the first time.
Buyers love to say, “It just came on the market and I was so lucky to see it first!” Not, “Oh boy, I was so lucky to find it. It was on the market for 100 days!”
Pricing your home to sell is a matter of good Home $$$s and sense.
Sue Thompson is owner and sales manager of HomeTown Realtors. She can be reached at seesue@seehometown.com, or on the Web at www.homedollarsandsense.com.