How to Price a Listing? Juliette “Jette the Realtor” Ferguson, Broker- Realtor, DRE 01405735, 831-402-3800, teamjette.com Video and Article dated: February 26, 2020
Here is the scoop on how a real estate property is priced. The seller decides the listed price. The realtor recommends pricing based on their expertise. If the realtor does not agree with the seller on price and the seller wants to start significantly higher, the realtor has the right to walk away from taking the listing. If the seller wishes to price much lower than the market value, the realtor will educate the seller to show them the strong likelihood of obtaining a higher price, e.g. a higher net return.
Personally, I walk away from overpriced listings. Listing above the actual value is not a problem; the issue is listing Way Above the value that is the problem. Unfortunately, sometimes agents want a listing and they will take it with a ridiculous list price. I am opposed to this practice because the result is always the same – the home sits on the market way too long collecting day on the market (DOM) an the home sells at a price below what it would have sold for if priced correctly the first time.
On this video, I discuss one situation where we listed a condominium for $595,000. It sold quickly for $575,000. We notified our seller that holding it longer could bring a higher offer, but in the particular case, the seller preferred a fast-easy close of escrow and was able to pay for his retirement home. A few weeks after this sale, a similar neighbor condominium joined the market and spent more than 3 months on the market prior to selling below the $600,000 mark. I believe that the home would have sold above the $600,000 mark if it was listed at $600,000 or $595,000 – somewhere within that range would have likely brought the seller the highest net return. Impossible to prove after the fact, I continually look back at listings we walk away from to see what transpires and to date, I remain thankful for walking away.
Recently, I met a woman and sold her home for $200,000 more than she expected. In that case, I suggested pricing her home much higher than she expected. She was very thankful as a result. In general, pricing a home near similar homes recently sold is the best strategy. Your realtor will help you determine if pricing above or below it slightly is better. This depends on the city, location, timing to market and of course the CMA – comparable marketing analysis. We offer this service free of charge to help homeowners understand the market value because we all know that the ever popular Zillow Estimate or Zestimate is a proven disaster in many cases. Nevertheless, my love-hate relationship with Zillow must wait for another day, another article. Jette
PS – The home discussed on video has since sold for well below 600K.
0 Comments