Price It Right

(The stalling housing market has caused most real estate agents and home sellers to put a renewed emphasis on the listing price of the home to be sold. )

The listing price of the home is now the number one factor that will determine how fast and if a home sells at all in today’s market place.

The problem that we are seeing that is further causing the market to stall is that home sellers do not have a realistic view of the market and the price of their home.

Many people are still living in the past; a time where home price appreciated over night and it took two weeks for a home to sell.

What home sellers need to realize is that if they price their home appropriately the first time around, they will have a better chance of it selling faster and it will not have to linger on the market for too long.

A December 3, 2006 article by Julie Clairmont of The San Francisco Chronicle, “When sellers won’t budge,” discusses how many sellers have unrealistic expectations that are inflating asking prices.

“Ask any real estate agent worth her lockbox key to identify the No. 1 reason houses sit on the market. Her likely answer: The sellers want too much for them.”

“Almost any house will sell if it's priced right, agents routinely preach. But in today's market overpriced houses are increasingly common as supply continues to outweigh demand and would-be sellers balk when told that their house may not be worth as much as it was six months ago.”

These overpriced houses are actually causing the market to stall even further because no buyers are even looking in its direction causing it to sit on the market with no action.

Almost every buyer out there will become very concerned if the house they are looking at has already been on the market for too long. Many will begin to think that there is something wrong with the house.

“There's a momentum to selling a home, agents say. Like a debutante at her first ball, a house is most intriguing when it hits the market, but let it languish too long and buyers become fickle suitors. ‘A property that is priced appropriately just doesn't sit on the market for six months,’ said Aldo Congi, vice president and managing broker at McGuire Real Estate in San Francisco.”

It is now more important that ever to use comparable homes that have sold in the last 30 days to help sellers develop their listing prices. Before, you could use sales from the past year or so, but the market is changing so rapidly that it is best to compare homes that have just sold quite recently.

The slowing home sales are telling us that the market is cooling significantly across the nation. “Nationally, existing home sales are expected to fall 8.6 percent this year, and are projected to even out in 2007 with a 0.6 percent decline, according to the National Association of Realtors.”

The best advice is for home sellers to be realistic in their asking prices and not think that their home is going to sell for last year’s price.

“‘Pricing a home is both art and science. The science part is using statistical data like appraisers use, such as price per square foot and recent sales comparables, the art means we have to look at all the variables and dynamics out there,’ said California Association of Realtors President Larry Spiteri, manager of Intero Real Estate Services in Danville, ‘everything from interest rates, to how many new homes are being built in an area, to where the buyers are coming from.’”

Back to Articles