Wednesday, January 16, 2008

Price Your Home So You Don't Lose Money

Dear Home Sellers,

I'll let you in on a little secret -- your home is not the only one in the Valley of the Sun that has dropped a little in value in the past 18 months.

Too many sellers today list with a gleam in their eye over the memory of what the neighbor sold for in early '06, the hopes of extra-large profits in their bank account, and a too-high price in the MLS. Too many sellers also choose their Realtor based on which one agrees to the highest list price.

Sadly, if you don't choose an experienced Realtor who helps you price your home right from the beginning, you're likely to spend months and months chasing the market down. With prices slipping incrementally each month, you'll net less money 3 months from now than you will if you price it to sell in 1 month or less.  The truth is in the MLS archives: overprice your home and you'll eventually sell for less than you could have if you'd priced right from the beginning.

So, what's "price it right" mean? In our current market, only 5 or 6 of every 100 homes for sale is actually selling. If you need to be one of those 5 or 6, you must:

  • Be priced less than the last sold comp

  • Be 1 of the 3 or 4 best priced homes of your type in the area

  • Have all repairs and Honey Do's done

  • Be professionally staged

  • Be on lockbox with no advance notice needed to show

If you can accomplish what I recommend above, congratulations! You've done a lot of prep work and you've got a fighting chance of being in the 5% to 6% of homes that actually get to hang a SOLD sign.

If you can't do what I recommend above, you can compensate by discounting your price, or offering buyer's incentives like closing costs paid, or a mortgage rate buy-down.

And if you could do the above, but just don't feel like it, what are you doing For Sale in this market?!? Buyers have the upper hand and they know it. Spare yourself some misery and take down the yard sign.

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