Pricing Dos and Don'ts
TIP: Build in a price reduction option up front. At the listing, get sellers to sign an agreement to lower the price by pre-approved percentages if the property hasn’t sold in 30, 60, or 90 days. Roberts generally asks for a 3 percent reduction after 30 days, but alters the time and percentage based on market conditions. —Ralph Roberts, Ralph Roberts Real Estate, Warren, Mich.
Setting the right selling price is the key to turning a listing into a timely sale.
- Do have a price range in mind before you go to the listing. You need to have a sense of where the listing should be priced to guide the sellers.
- Don’t rely only on comparables to arrive at a price. Consider supply and demand. Maybe you’re in a hot market where demand outstrips supply, and you can try for a higher price than you normally would.
- Do consider sellers’ urgency. If they must move in 30 days because of a job transfer, snagging the highest price may not be a top priority. A lower price may help move the house more quickly.
- Do weigh the home’s condition. If floors are scuffed and the place is cluttered, explain that a stale, worn look will negatively affect pricing and the ability to sell. “Somehow you have to dig up the nerve to tell them that buyers will expect a coat of fresh paint and new carpeting. If they won’t update, I have to consider that in the pricing of the house,” comments Judy McCutchin, RE/MAX Preston Road North, Dallas.
- Do use MLS illustrations. Show examples from the MLS of overpriced listings. Illustrate the number of times the price was reduced and how long it ended up taking to sell the house. Look for listings—initially overpriced—that eventually sold for less than their worth.
- Do ask for a commitment to reduce price. If you agree to an unrealistic price, you’ll know within a couple weeks. Get sellers to agree to a price reduction after a set period—two weeks or so—if you aren’t getting traffic and offers.
- Do know when to walk. If sellers are adamant about going with a price you know is too high, walk away. Says author and trainer Ralph Roberts, Ralph Roberts Real Estate, Warren, Mich.; “I’d rather turn down the listing than disappoint you by not being able to sell the house for what I think is an unrealistic price.”
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