Ok, so you are thinking about listing your house. If you are already listed and part of the growing ranks of the un-solds just pretend you are starting over. Like there was no yesterday. Because if you really want to , you can change your situation tomorrow.
This may sound like a dumb and dumber version of Real Estate for Dummies. I apologize in advance if I offend anyone’s sensibilities. But what I’m going to say applies to the vast majority of Sellers out there – whether they un-cup their hands from their ears and stop singing La La La La long enough to hear it or not.
There are two methodologies for pricing a home. One is market-based and the other is something akin to playing the lotto.
For months I’ve been badgering you with two mantras everyone should carry in their real estate repertoire. One more time? Ok. Here they are: 1) At the right price, everything sells. 2) At the right price all objections disappear. Simple.
The market is a remarkably honest feedback mechanism. But the truth is, most people in a transitioning market (downward) don’t want to experience the pain of honesty. It doesn’t matter what they think their home is worth or what they feel they need to get for it. It doesn’t matter what their Agent thinks it is worth. A house is worth what the market will pay. Those of you still sitting without an offer in sight? You’ve got a definite objection that your price just isn’t disappearing.
I’m officially adding a third mantra to the list. Repeat it as many times as it takes to sink in. “At the right price, there will be more than one buyer for your home.”
This is the premise of market-based pricing. It’s why so many people are running around collecting comps and trying to make sense of them. (Hard thing to do in eclectic SC County.) The value of any home stands in relationship to every other home. When buyers look – they look at more than one house. They compare what they can get for what it costs to get it. If you have something good for the right price, compared to what else is out there, buyers (plural) will want it.
If you are listing or selling your home and would rather toss market logic out the window then there’s always the lottery approach to fall back on.
The catchphrase that best captures the essence of lotto pricing is this: All it takes is one buyer. It’s also the most common rationale Sellers use when their houses aren’t selling. All it takes is one. You may be getting one lonely showing every couple of weeks but… all it takes is one. You may be going broke in the process but all it takes is one.
Pricing a home for that one right buyer that meshes so perfectly with it, they won’t care what it costs, is a pleasant thought. Imagine that one right person walking through the door, instantly smitten and ready to write an offer for any amount. And yes, they are eminently qualified to pay all cash, no contingencies, no appraisal worries. How soon do you want to close?
Possible? Sure, It’s possible. In the same way that we could meet tomorrow morning, buy lotto tickets at the mini-mart and win the big spin. The odds may be against us – but that doesn’t mean we won’t hit paydirt tomorrow. Or the next day.
Or perhaps twenty years from now, we’ll still be buying tickets convinced our odds are getting better as time goes by. We’ve spent thousands of dollars. We’ve invested all that time and hope. We can’t cut our losses and quit now. We have to win back all that money we’ve spent trying to win.
All some of you Sellers need to do is continue those mortgage payments you’ve been paying on that empty house, while waiting for the perfect buyer to show up and you don’t have to meet me. You are already playing the lottery. As inventory increases, your odds of winning decrease. As days on the market increase – ditto. You aren’t getting closer. You are getting further away. And it’s costing you a bundle – financially, emotionally, psychically – trying to score that one fantasy buyer.
Keep it up long enough and you’ll chase the market down far enough, you’ll wish you’d given alot more thought to Gambler’s Anonymous sooner.