It’s How Much?

Selling a property successfully in 2008 is really a process of putting together pieces of a puzzle and ultimately creating a beautiful picture. These important pieces can include things like staging, painting, new landscape, choosing the right agent, remodeling, installing granite counter tops, eliminating clutter, printing attractive flyers, virtual tours, advertising, open houses and choosing the right time to list…to name a few. None of these things, however, are anywhere near as important as pricing the property correctly. This really can’t be overstated, no matter how much work you’ve done to the property if it’s not priced right it’s not going to sell.

Maybe the best way to illustrate this is to make it as absurd as possible, but before I do that it’s important to say that every single home, whether it be condo, townhouse of single family, has a flaw. Most have more than one. These flaws might be something structural or something cosmetic. It could also be location. There’s no such thing as a perfect property. Ok, so let’s take the house in the picture above. It’s a 5 bedroom, 2.5 bath Foster City house on narrow water that I sold in 2002. Let’s say we list it next week for $599,000…there will be NO flaws big enough to prevent multiple offers. It wouldn’t matter if the foundation was shot, it’s at the confluence of a T-intersection, farm animals are raised in it and there’s gaping holes in the roof…this house is getting multiple offers. Now there’s no guarantee that the house will sell for it’s real value but lot’s of buyers won’t care what’s wrong with it. People will jump at the chance of getting a waterfront house for a bargain!

Now let’s look at it the other way…we’ll list it for $3,000,000. It won’t matter how much upgrading we’ve done or how great the quality of that upgrading, it’s simply not going to sell for that much money. You would hear people say “I’m not spending that kind of money for narrow water in Foster City”. Right? Pricing a property right really is sort of an art. Condos & Townhouses are actually a bit easier because there’s going to be very similar comparable sales to look at but single family houses can be trickier. The goal should be to find a beginning price for which a prospective buyer willingly overlooks the properties flaws. When that occurs in the minds of buyers it frequently results in multiple offers for the seller. I say a beginning price because it’s very hard to recreate a listing’s initial momentum once 30 days or more has gone by. Recently, there was a great example of this in Foster City with Jessica Yau of Prudential’s listing at 800 Marlin. Great 5 bedroom house and it showed wonderfully…it also was on a fairly busy street. Jessica and the sellers priced the home perfectly at $1,198,888 and guess what? It got 8 offers after 5 whole days on the market! The busy street became irrelevant. It also happened last week with Denice Nagel’s townhouse listing on Aquarius in Shell Cove priced at $718,000…6 offers. Often, the biggest reason a house is slow to sell is that prospective buyers don’t see a value in the necessary relationship between what a property offers and where it’s priced.   

Comments

  1. Are these prices really less than current market value? Aren’t they just bait?

  2. I really think the smart stategy is to price a property slightly lower than current market value, yes. Again, the trick is not going too low! Once the correct perception of value has been met in the minds of potential buyers the home will sell quickly. Here’s the thing…the 2 listings I mentioned did NOT sell for less than market value.

  3. Grant H. says:

    I have spent too much time reading the newspaper and media headlines-all the doom and gloom out there!! I got scared and decided to wait to sell. I am stuck now as i extended my contract with current job and cannot move. I should have been reading your blog!! you could have sold my house and I’d be back with my folks in Arizona now.

  4. I’m always available for enlightened, intelligent persons such as yourself, Grant! Anytime you would like a feel for the value of your place, let me know.

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