I usually tell homesellers that there are fundamentally only two reasons why a home does not sell – it is either marketing or price.Â If after 2-3 weeksÂ ofÂ good marketingÂ a homeseller is still not getting showings (much less offers) then it is a good indication that the priceÂ needs toÂ be adjusted.
Pricing a home to sellÂ should be done strategicallyÂ so that your home isÂ more attractive than competitive homesÂ currently on the market.Â Homeseller want their home to be pickedÂ andÂ have an offer written on it rather than to be used as a negative comparison why another property is a “better deal”.
In a strong “sellers market” it is sometimes a good strategy to price aggressively at or even slightly below the market price in order to generate multiple offers.Â This way sellers usually end up with a higher net than if they they priced too high initially and have to drop several times.
The purpose of careful pricing is to generate offers.Â Homesellers can always say “no” to any offer, but they cannot say “yes” to no offer.Â A good sellers agent will try to negotiate a low offer up to what is acceptable to the seller and will not stop negotiations until it is clear that the buyer will not come up further.
Even though it seems trivial, a property priced at $999,000 will receive more attention thanÂ if it wereÂ priced at $1,000,000 or justÂ slightly above.
If potential buyers or their agents judge that a property is “overpriced” they are reticent to make an offer for fear of offending the seller – they will wait until the price is dropped.Â If sellers drop their price even onceÂ it may cause potential buyers in a slow market to wait until they drop their price again.Â Best to price right the first time.
If the market is declining, however, it is better to “get ahead of the decline” rather gradually than incrementally “follow it down.”
Rick Bonetti, Alain Pinel Realtors, 408-857-8800, DRE#01237009