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Jeffrey T. Sandorf's Blog

By Jeffrey T. Sandorf | Agent in Brentwood, Los Angeles...

Pricing Your Home to Sell

Pricing Your Home to Sell by Jeffrey T. Sandorf

It is more important than ever for sellers to price their homes at realistic values reflective of the current market.  Buyers are now more selective, informed and far less likely to be rushed into making an offer.  With more online access to homes, statistics and neighborhood comparables most buyers will not submit an offer to purchase a home if they perceive the property too overpriced. 

 

A common result of a Seller overpricing their home is that there is little momentum or “buzz” generated when the home hits the market.  The initial marketing exposure and advertising would likely be of limited value as approximately four times as many people visit a new home in the first week.  Serious buyers may steer clear of the home because of the perception that the seller isn’t serious about selling.   

 

The longer a home sits unsold at an above-market price, the more agents and buyers become aware of how many days it’s been on the market and may consider the home to be stale and tired.  Overpricing will also have the effect of aiding the sales of competing neighborhood homes before yours.

 

An obvious solution to jump starting an overpriced home is to reduce the price.  While this is a great means to cast a wider net of potential buyers, only a meaningful price adjustment will have the desired effect of making a splash.  Small incremental reductions or “chasing the market” will likely only further delay a sale if the revised pricing continues to be a step above the market value.  Buyers may also be leery of a home with constant price cuts believing it is a problem property.  Pricing correctly at the onset will also help save the additional months of making mortgage payments, property taxes and time associated with more open houses and additional showings.

 

One interesting trend we are seeing is that some sellers are taking a more proactive approach by pricing their home below market to stimulate multiple offers as well as stating offer deadlines and guidelines in advance.  In fact, a local home was recently listed at such an attractive price that it received thirty two offers, eleven of them all cash, all in the first week of listing.  The accepted contract price was $300,000 over asking and above the actual market value of the home.  The result here was that the property sold in a week to an all cash buyer likely well above what would’ve been the typical list price.  It is similar to an auction mentality if you have ever seen a professional auction.

 

While it’s not necessarily advisable for all sellers to under-price so dramatically as in the above example, as sellers are getting more realistic with pricing, more homes are selling and at a faster pace.  In fact, a study released last month conducted by the Chief Economist of the California Association of Realtors, Leslie Appleton Young, revealed that 51% of all homes sold in California in 2010 had multiple offers.    In our local market, the 22 homes that sold in October 2010 were on the market an average of 90 days and sold at a 7% discount off the original asking price versus September 2010 which included 17 homes sales at an 11% discount.

 

So we recommend you speak with a seasoned real estate professional who can guide you to the proper pricing of your home. Listing the price correctly out of the gate, especially when four times the number of people will view your home in the 1st week it is on the market, will not only help your home sell faster but at a higher sales price. 

 

Jeff Sandorf is a Partner in

Amalfi Estates, a Pacific Palisades

real estate company. Contacts:

(310) 625-4099 or visit

www.AmalfiEstates.com

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