So here’s a question. Let’s say you bought your home 4 years ago for $200,000. Then last year when the market peaked, it was valued at $265,000. Today, your agent says that you must list at $240,000 to compete. Which of the following statements best expresses how you feel & why:
- Yes! I’m going to make $40,000! or
- OMG! I’m going to lose $25,000!
I’d like to hear your comments if you have any.
I would see it like this: 1. Okay, I’m going to make $40,000!
Now it may not have covered all expectations, but if a home owner is desperate to sell in this market, there are trade-offs.
So many people thought that the inflated equity in their home was like money sitting in their bank account. It wasn’t realistic. To answer your question, I would be happy to make the $40,000.00 and not think OMG I lost $25,000.00. I hope more poeple will think this way.
Won’t deny that my first thought would be…I’m losing $25k. Especially if I took out a second to cash out some equity.
If you put our house up in this market, how do you know if you’ve over-priced your home? How often would one expect to show the home if its priced correctly (not too high and not too low)?
Oops typo:
If you put a house up in this market, how do you know if you’ve over-priced your home? How often would one expect to show the home if its priced correctly (not too high and not too low)?
A well priced listing will show between 2-4 times a week, normally resulting in at least 1-2 offers within the first 30 days. This obviously is not an exact science, and will differ depending on how broad or narrow the market is for that particular property. However, for the “average” house that appeals to the “average” homebuyer, this is a good rule of thumb. More activity than this and you might be under-priced, less activity than this and you are probably over-priced.
Now you might be wondering “what about the market conditions, buyer’s market or seller’s market”. As far as I’m concerned, this rule of thumb still applies despite supply and demand. But “expert pricing” is your tool for controlling the activity.
Expert pricing is the one of three main keys to getting a home sold. It requires accurate data, experience, and a firm understanding of what the market demands are for the specific geographic area.
The other two main factors in getting a home sold are presentation and exposure. see post “re: Why isn’t my home selling?” for more on this topic.
Another great question. Thanks Nathan.