very home seller wants to At the same time buyers are out
get the highest price looking at homes to buy. They are
possible but setting the qualified to buy homes in the
price too high, even if you are $550,000 range and they see the
willing to take less, may not be listing and compare it with other
the best strategy. similar priced properties. These
potential buyers see our example
As an example lets assume we have listing is not as large or does
a seller who is working with a not have the number of upgrades
good Realtor and through or features as other homes
reviewing comparable homes that selling for $550,000. When there
have recently sold and those on are plenty of houses to look at,
the market it is determined the buyers will skip some listings
value of the home is $500,000. and only look at homes where they
The seller may even agree with feel they are getting the most
the agents’ assessment of value for their money.
but feels it is worth trying to
get more. So he requests the They buyers who are qualified to
house be marketed for $550,000 by a $500,000 home are looking in
knowing if he accepts a lower that price range and generally do
offer it may be higher than the not want to look at homes much
$500,000 originally suggested by more than $525,000. Taking
the Realtor. The agent does their negotiations in to consideration
job, places the home in MLS, prices above that amount are
provides online photos, prints likely going to end up being more
flyers, advertises in the than they can afford and/or
newspaper and even does open qualify for. These potential
houses. The seller sits and waits buyers will probably not see our
to get offers he can negotiate. example listing priced at
$550,000.
home at its market value from the
In today’s market this situation start will generally result in
seems to happen more often than getting an amount closer to the
it should and causes homes to sit asking price. Sales prices of
on the market for long periods of homes in the Sacramento area have
time. With our market of growing been averaging higher than 97% of
inventory levels, listings can asking price. Getting the highest
become stale very quickly. The price for a home is best achieved
first two weeks on the market is by maximizing the number of
the time listings generate the potential buyers who see the home
most interest and activity. When and that can be accomplished by
homes are on the market for avoiding overpricing.
longer than the average time, for
a given price range, buyers start A recent National email survey
feeling hesitant to consider conducted by House Hunt, Inc and
them. It is like the early days reported in a story by RISMedia
in the video rental store where indicated that overpricing was
people crowd around the “new the number one mistake home
release” section and some great sellers said they made when
movies in the drama isle get no listing their homes. The margin
attention. In this situation, it was nearly three-to-one over the
is my experience, even if the second choice which was “dealing
seller elects to lower the price with the same agent who
to something closer to the market represented the buyer.” That and
value, they will likely receive potential conflicts of interest
less than if they had started are good subjects for a future
with a lower price. article!
There is a fair amount of The bottom line in setting the
research that indicates pricing a price on a home is to set it
within 2 to 3 percent of the highest price possible and in the
market value. This increases your shortest amount of time.
opportunity to sell at the
About the Author:
Julie Jalone is an experienced professional Realtor serving the need of buyers and sellers of residential real estate in the Greater Sacramento area including Placer, El Dorado, Yolo and Yuba counties. Some of the communities served by Julie include Sacramento, Roseville, Rocklin, Lincoln and Granite Bay. Julie is a wife and mother living in Rocklin. For more information see her website, www.jalone.com, which includes listings, local real estate market analysis, news, resources for buyers and sellers and her daily weblog, ”Keep it Real in Sacramento.”
