It was 2001 and like many newly licensed agents, I was going to teach this industry how it was done. I had years of previous sales careers and had for the most part, been successful. I jumped in with both feet and was off to a pretty fast start with buyers when I had an opportunity for my first listing.
A friend decided that it was a good time to move to a larger home. Their smaller rambler was getting
crowded and with the anticipation of children in the future, it made sense.
I set out to do my first Comparative Market Analysis and all indications suggested a price of $200,000 or slightly less. Being inexperienced and applying lessons learned in another field, I believed that if we priced higher, we might get it and if not, we’d at least get what the market indicated. Was I wrong!
First, we weren’t that much higher, $4000 or about 2% but that 2% I now believe was all it took from being just listed to sold. We had traffic at the open house, we had showings but we just never received any offers. I revised my marketing materials, updated pictures, hosted more open houses, but no luck.
When we first listed the home I had a general agreement to do a price drop after a while on the market. The problem was, I did have one person believe in my approach, my seller. Despite our original agreement to the drop, when I finally asked for it, they hesitated, now convinced the home was worth what I suggested. We did eventually drop to $201,950 but too little too late.
Time went on, the showings slowed down and eventually stopped and they requested we cancel the listing.
What did I learn? Pricing in Real Estate is not the same as other consumer based retail marketing. Extended time on the market hurts the seller. The longer a home is listed for, the more people ask, “what’s wrong with it?” Sellers don’t enjoy having to entertain showings. Getting agreement on pricing strategy early on, including future drops is important and the reasoning should be understood by all. Finally, pricing it right to begin with arrives at the best results; a higher final price, shortest time on the market and greatest client satisfaction.
I explain this strategy more in 4 Keys to Selling Your Home Quickly and for Top Dollar. Pricing is just one of these keys. Doing it all well results in a happy seller, a great offer and a closed sale.
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