You're reading...
The Business of Real Estate

Pricing to Sell


If you have talked with a real estate agent — at least an experienced one — about selling a home you have undoubtedly heard that you should price the property correctly from the start. You may have thought, “Yeah, that’s just to make a quick sale and get paid.” If so, you were half right …

A recent article from the Washington Post ( The right listing price can be the difference between a quick home sale and a long slog )makes an important point:

“Typically, your eventual offer will be much lower than if you priced your home right from the beginning …. That’s because an overpriced house will sit on the market too long and buyers feel they can offer less.”

Real estate professionals do care about selling in a reasonable timeframe for the location and market conditions. You should care too. In the Austin area in recent years, demand has far exceeded supply and many sales have been contracted with hours or days of listings hitting the market. Buyers who are frustrated by not being able to move fast enough to make a successful offer may begin to think that if a listing lasts a few weeks there must be something wrong with the property. They may make a discounted offer or simply choose not to see it at all.

If you follow me on this site or on social media you know that data matters, so here are a couple of charts showing exactly that in the Austin area since January 2017:

The average ratio of ultimate sales price to original list price across that 28-month period was 97.65%. The average sale price over the same period was $371,378. That makes the average list price of those sold properties $380,315, meaning that the average home seller sold for almost $9,000 below the asking price.

But look again at the first chart and notice that the “Sold 91+ days” line averaged about 94% across the 2-plus years. Using that average list price of $380,315 again, that says that those sellers sacrificed $15,000 while they continued to make mortgage payments, accrue property tax and HOA obligations, and maintain homes many had already sold mentally and emotionally. They would have been better off to price their homes right from the start, bank or invest those extra proceeds, and move on to the next chapter of their lives.

On this site you’ll see that I study the market constantly and carefully, and I bring that knowledge and experience to price consultations with my clients. Setting the price is always the seller’s choice, but I owe my clients the best professional advice I can provide, and the discussion above is an important topic for all.

Is pricing all there is to getting your home sold? Of course not! See Beyond Price for more.

About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: