When selling their home sellers are always looking for the most they can get, and who can blame them. The more they get out of their house the less they have to take out of savings for that bigger and newer house they will be buying. But sometimes what they don’t think about is, what it could actually be costing them to try for a little bit more money.
Good market or bad, updated or needs work, there is a right price for every property. That right price does not mean a cheap one. Sometimes the right price could be the highest for that neighborhood when the property is decked out with updates. But going too far above can make a house sit on the market I have seen it over and over in comps. Everyone thinks their house is the exception to the rule, if that was the case then that would be the rule and not the exception. There are not that many exceptions!!
There are exceptions for everything but here is the rule – or the facts – for people who started a little high in our market and then had to lower their price at a later date compared to ones who did not lower their list price before getting a contract. Out of a list of 59 existing homes closed. These numbers are based on the averages from that list.
The Starting List price for those price right was $267,500, the starting list price for those wanting to try for a bit more was $275,900. They were not trying for much more, just over $7000 more.
When the house sold the list price for the first group was of course still at $267,500, but the other group had lowered their list price to $266,500. Just a $1000 dollars below were the other group was out.
But here is the first kicker, the first group closed for $265,000, the I want to try for more group closed for $260,900. That “a little bit more” ended up costing $4100 compared to the pricing it right at the beginning!
Here is the second kicker, the first group sold in average of 27 days. The second group not only sold for $4100 less but they averaged 118 days on the market. 91 days longer!
Getting across to sellers the importance of pricing right will actually put more money in their pocket and in a lot less time. Pull up the stats in your area and see if they follow what has been the rule here for 20 years.
Brian Preston. GRI
RE/MAX At Home