Heading into the fall and winter, it is important to educate your sellers on the best pricing practices to ensure that their home sells for the most money. Pricing a home correctly from the beginning vs. pricing it higher in order to leave ‘room for negotiation’ actually nets the homeowner more money.
This was reported on in a post we have run before by Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research. Dr. Johnson explained that proper pricing has been studied by John R. Knight:
“The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties…
Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start. Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight. Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors. Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.”
It is important for agents to work hard pricing the listing correctly from the start. If not, it will cost the seller both time and money.
Relevance… Sellers need to accept the conditions of the current market and listen to their real estate professional. pricing is as important as a great marketing plan, maybe the MOST important. Just because we have had a surge in real estate activity, it does not mean that we can be overly aggressive on our pricing. Price it right on DAY ONE and you should be very successful in getting the home sold within a reasonable time frame…
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