Inman News
These 5 points form the bedrock of every successful listing.
Once a property is listed, selling it takes work.
That work begins with pricing the property accurately. Establishing the right price is essential before putting the property on the market.
A new property listing should be correctly priced before the ink on the listing agreement has time to dry. A brand-new listing always appears on MLS on the “hot listings” page or at the top of the active property list. Newer listings usually sell for a higher price than properties listed on the market for a more extended period. As the weeks pass, potential buyers begin to wonder why it hasn’t already sold.
So, what should you do to prevent a very long listing period? These five points are very important when strategizing about how to price a property:
1. An impartial evaluation of market activity is the most effective way to estimate a property’s selling price.
A comparative market analysis (CMA) is a great tool for sellers to see similar, nearby properties that recently sold. The CMA can also show homes that are currently active on the market as well as those under contract or those that recently failed to close.
The sale of comparable properties during a specific period – usually the most recent six months – establishes market pricing.
2. Sellers must accept that the real value of their home is determined by what a buyer is willing to pay for it in today’s real estate market.
Another critical point in pricing revolves around a seller wanting a certain amount of cash from the sale of their home
What a seller wants to receive at the closing table doesn’t affect the home’s market value; the market doesn’t care what they need!
This fact is painful for some sellers to accept because they might be counting on money from the sale of the home to go toward the purchase of their dream home.
If they cannot grasp this reality, then the listing may not be a marketable one, and efforts to sell it could be for naught.
3. The longer a property remains on the market, the lower the price must be for it to sell.
Statistics show that when a property is not correctly priced from the start, it nearly always ultimately sells for far less. As a result, the seller will lose a considerable amount of time and money.
4. Three elements impact the sale of a home: price, condition, and location.
Of these three, the seller can control price and condition. Condition can have a bearing on what a buyer will offer for it. Do everything possible to present the home in a condition that will enable it to compete with similar properties for sale.
5. Many times, brokers will be competing against other brokers for the listing, so take promises with a grain of salt.
Sellers may speak with brokers who say the listing price should be at “X.” What a competing broker says about what the price should be doesn’t affect its value.
Unfortunately, some brokers will tell sellers what they want to hear regarding value, only to then badger them later to keep reducing the price so they can sell the property.
The problem with this strategy is not only that it’s not honest, it is likely to sour the relationship between the seller and the broker.
A listing broker’s responsibility is to find that one “ready, willing and able” buyer to purchase the home. That’s going to be exponentially more difficult if the property is not priced right from the beginning. Sellers will find themselves waiting a long time for a buyer to submit an offer to purchase.
Pricing their property correctly from the beginning benefits sellers by giving them more money in their pocket and getting the property sold in a timely manner.