Selling Poinciana One Property at a Time.: What is the 'Right Price" in today's market?

What is the 'Right Price" in today's market?

Hi folks. Many times over the years I have heard from Sellers wondering why their home hasn't sold. The usual comment is "it's priced right". Well is it really? My experience has been that any property will sell if the price is right. What is the "Right Price" in today's market? Is it "Market Value" based on the last 6 months of sales? Is it based on homes that have sold in the last 30 days? Is it the "Appraised Value"?

The "Right Price" is the price that will sell your home in 60 to 90 days. But what is this magical number and how do we arrive it? Well in my market (Poinciana, Fl) the right price is 10% to 15% below recent comparable sales. When Realtors are searching the MLS they may have 100-200 homes that meet their Buyer's parameters. My Seller's property, in order to sell, needs to be in the top 5 (preferably #1) properties on the list (by price) and it needs to have a competitive or better co-broke.

If you can achieve this positioning you should be able to get the property sold in a short period of time. Seller's need to know this. It is very important when pricing a house to look at the whole picture that includes active, pending, withdrawn, expired and recently sold listings. I know this is Real Estate 101 but I have met with many Seller's recently whose listings have expired and they have never even seen a "Market Analysis". When asked how they arrived at the listing price they say "this is what we told him/her we wanted." They used a little known technique to price their property it goes something like this:

Down payment for house I want to buy + moving expenses + credit card debt + closing costs + Realtor commission + current mortgage balance="Market Value".

Now I know this may be the new math but folks it won't get your house sold. When hiring a REALTOR(R) it is important that that REALTOR(R) provides you with a detail analysis of current market conditions and counsels you on what it will take to sell your property. They need to be 100% honest about pricing. It may not be what you want to hear but it must be what you need to hear. Then and only then can you make an informed decision on how to list your house at the "Right Price".  Make sense?

 

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Comment balloon 56 commentsBryant Tutas • September 11 2008 01:41AM

Comments

Reserved parking for TLW

I'll be back!!!

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 11 years ago

Well said BB.  Succinct and to the point.

Even if this is real estate 101 this can't be said often enough.  I really like how you put this in terms of competitiveness.  I feel that  a lot of people fail to think about things in that light.

If you want something sold you're going to have to think in terms of competition.

Posted by Caleb Mardini about 11 years ago

BB - It makes sense to me, pricing the property right to begin with is the key to success for you and the seller.

Posted by Petra Norris, Realtor, Lakeland FL Homes for Sale (Lakeland Real Estate Group, Inc.) about 11 years ago

Bryant- I don't understand why an agent wants a listing that will not sell because of price! It just does not make business sense.

Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) about 11 years ago

Good post.  I have been busy posting a similar one today.  Great minds and all that  :)

Posted by South Austin Real Estate Blog (Sky Realty South Austin) about 11 years ago

BB, very well said and it needed to be said. BTW, enjoyed the clip. Wishing you the best with your listing. :-)

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 11 years ago

"Down payment for house I want to buy + moving expenses + credit card debt + closing costs + Realtor commission + current mortgage balance='Market Value'."

That still has me ROTFLMAO.  I'll be laughin' over that line in the days to come...an instant classic in my book.

Posted by Matt Moxhay, Moorestown Real Estate (Prudential Fox & Roach) about 11 years ago

Hi BB,

Good post, I like the sellers basic math 101. It worked at one time but assured not in today's market. 

Nice looking property in the video. Good luck with your marketing effort.

Posted by Harold "Hal" Place (A1 Connection Realty, Inc.) about 11 years ago

Hi BB:

The answer is still the same; The price that a buyer (ready, able & willing) will pay. The sad part is there are TOO MANY choices for buyers and if a property is not in the bottom 10% of asking price- it may never get shown at all.

Posted by Aventura | Bal Harbour | Sunny Isles Beach | REALTOR® 786-229-7999 (SIB REALTY, Llc // WaterWayRealty.com) about 11 years ago

You hit the nail on the head with this one! It made me laugh because so many sellers use this very formula (or try to!).

Posted by Kelly Sibilsky (Licensed Through Referral Connection, LTD.) about 11 years ago

That "new math" is very funny.....but also very real.  You don't know how many times I've heard that.

Posted by Pam Pugmire, Meridian Idaho Real Estate (Silvercreek Realty Group) about 11 years ago

Bryant, it's almost always the price.  Once in a while, it's a bad smell or Realtor-eating dog, but other times it's the price;

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) about 11 years ago

Bryant,

I am so with ypou on this point.  It may not be what the seller wants to hear BUT It is what they NEED to hear!  User the market analysis and know your market.

Posted by Don Rogers, Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes (Keller Williams Realty Chesterfield) about 11 years ago

The Wall St Journal had an article today about condos and auctions, but it mentioned "trying to catch a falling knife" vs letting it fall and going from there. That well describes the market.

Posted by Sharon Simms, St. Petersburg FL - CRS CIPS CLHMS RSPS (Coastal Properties Group International - Christie's International) about 11 years ago

I understand but I have a special home with extra long nails and it cost 10,000 more so can I get more money for my house than my neighbor did? The logic seems to go out the special windows when I talk to the seller. I'm going to start using truth serum on my sellers. 

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) about 11 years ago

BB - Well that IS the ultimate question, isn't it? The new math probably won't work, at least not in any market I know, but it seems lots of folks have learned it. Finding the right stuff to give them so they really CAN get it and give up their unique perspective is the hurdle to overcome.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 11 years ago

I think that is the "new math" that they teach at school...

Posted by Melina Tomson, Principal Broker/Owner, M.S. (Tomson Burnham, llc Licensed in the State of Oregon) about 11 years ago

"Down payment for house I want to buy + moving expenses + credit card debt + closing costs + Realtor commission + current mortgage balance="Market Value" --- you WILL be quoted in my staff meeting tomorrow and by gosh if I can get someone to video it I'll send it to you. You know who gets railed upon for correcting this math equation? (/me raises hand) And people wonder why we won't meet their "sales price".

A++

Posted by Ken Cook, Content Marketer/Creator (Content, coding, marketing, host.) about 11 years ago

Bryant, this is a great post. Here in St. Pete Florida is has never been easier to determine a "sellable" price.

All we nned to do now is look at the recent sales and price it right below the comps. everything that is priced above the comps sits for ever, I mean 300 days, 500 days. . . . .

Posted by Anne Hensel, Realtor - Broker - St. Pete Beach, Treasure Island (South Beaches Real Estate Professionals) about 11 years ago

I love your new math explanation which unfortunately is probably too accurate in many cases.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 11 years ago

Hi BB,  Loved your explanation of the new math theory!  Sellers wish it would work that way.  Also, I just love your video commericals.  Make your day great!

Posted by Eunice Waller, Working Together, We Can Do Great Things (Berkshire Hathaway HomeServices Simpson Realtors) about 11 years ago

Agree 100 % and very well said. Pricing the home right in the beginning ensures a successful sale. One day homeowners will get it. Arggg

Posted by Melissa Grant, The Law of Attraction In Life & Business (A Serendipity World) about 11 years ago

gee a market analysis...what a novel concept....ya think? no that would make too much sense....i love the sellers that think that the perfect buyer will just stroll into their house one day with cash and no comparables and their brain not fully functioning and will purchase the house right there!

Posted by Michael Sahlman, e-PRO - Miami Beach Florida Luxury Homes (www.HomesForVIPs.com - Keller Williams Realty) about 11 years ago

BB,

Even if you price a home right in today's market ..by the time it sells it seems to be worth less. It seems we are always chasing the market. It's pretty frustrating when you have to keep telling sellers that the reason they aren't getting offers is because of the spiraling prices and there is other inventory that keeps dropping to cause buyers to look at them.  I also think that people aren't getting qualified as easy for mortgages and that isn't helping either.It's always our fault but hey...we can't satisfy them all I guess.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (Brokered by eXp Realty LLC) about 11 years ago

I agree its the price that a seller will sell , and a buyer will buy. Ive been told that since I started.  Unique and fairly priced properties are being shown and sold.

Posted by Justin Douglass (Benchmark Residential & Investment Real Estate) about 11 years ago

Math is too complicated for me.  I rely on simple minded stuff.   Like, if it hasn't sold, you haven't reached the right price. 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 11 years ago

"I am not going to give my house away"  True- you are either going to price it right or own it for a very long time!

 

If you tell a seller what they want to hear to get the listing- you will end up telling a seller every other excuse in the book for why you failed to get it sold.

Posted by Allison Stewart, St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904 (St.Cloud Homes ) about 11 years ago

AHHH the right price...isn't that what every broker should strive for but yet so many miss the boat on. I like Lenn's thoughts:)

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 11 years ago

I really enjoy BPOs because it gives me a good idea how much upgrades are going for and how much those REOs are fetching for VS Owner Occupied non-distressed (currently add another 5-10%!)

Pricing is an art.  My potential sellers get a range, just like a BPO.  The bottom range is:  do you want your home sold in 30 days?  The top range is:  this is a six month marketing period and do you want to possibly chase down the market?

If the sellers don't like my range, I take my ball and go home.  That means they will fight me along the way among many other things and I don't care to be yelled at for 6 months for non performance!

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) about 11 years ago

BB-Ditto to Allison's comment!  Price it right in the beginning, or be the bad guy later!  Many sellers just don't understand. I hear far to often, as many of us do, "But I HAVE  to have this much"...sorry, no can do! 

You have some great comments here!  I should print this out and take it with me on my next listing appointment. I'll pull it out and read all of these to myself, as a reminder to NOT give in on the price:) 

Posted by Elizabeth Cooper-Golden, Huntsville AL MLS (Huntsville Alabama Real Estate, (@ Homes Realty Group)) about 11 years ago

BB- I have a new theory (not really new, but new to me), It you don't have a contract in 30 days, reduce to price by 1 percent. Assuming you start at whatever you thought was the correct price, you shouldn't have to do this at all. But just in case. the seller is prepared to do this up front. THis is assuming that the seller still lives in the house. If it's vacant, speed up the process to every 2 weeks. Does this make the seller nervous? You bet, but my argument is that when it's priced right, the market will find it and take it off your hands.

By the way, what do you use to make the slide show?

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) about 11 years ago

Hey BB!

Pricing is everything, obviously.  I believe it's what the consumer is willing to pay, especially in this market.

Posted by Yvette Smith, Realtor In Williamsburg VA, Homes for Sale (LONG & FOSTER) about 11 years ago

Wow,  that sounds like death spiral pricing. I'm glad it's not like that in my market area.

If you go through four rounds of 15% under the last sales you'll cut prices in half.  I can see why buyers are sitting on the fence waiting. I assume that pretty soon prices will be less than the replacement cost. 

Posted by Tim Maitski, Editor of MaitskiREport.com (HomeAtlanta.com) about 11 years ago

I LOVE your new math equation.  Do you mind if I use it?  Made me laugh out loud because it is the math many of my sellers have learned!  However, I find that MOST sellers are now becoming much more realistic, directly related to how sophisticated they are.

Posted by Janna Scharf, Coeur d'Alene Idaho Real Estate Expert (Keller Williams Realty Coeur d'Alene) about 11 years ago

Your math equation is spot on BB.  Hilarious!  While I laugh at it, the unfortunate thing is that it is actually the truth.

Posted by Jeremy Blanton, Myrtle Beach REALTOR®- myrtlebeachhomesblog.com (Myrtle Beach Homes Blog) about 11 years ago

That's the best REAL TIME math equation I've seen!  We need Tshirts!  Where can I get my Tshirt??

"Down payment for house I want to buy + moving expenses + credit card debt + closing costs + Realtor commission + current mortgage balance="Market Value" (period)

Maybe the words could wrap all the way around you!!!  WOW!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) about 11 years ago

I couldn't agree more. And it takes constant updating to make sure your price is on target. Good post.

Posted by Judy Peterson, "Superb Service, Superb Results" (Berkshire Hathaway HomeServices Fox&Roach Realtors ) about 11 years ago

And not only the price... like for instance...great price and looks cluttered and the yard has 10 ft. weeds. No one is going to pay market price for ugly.

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Liberty Homes) about 11 years ago

What you said...'In YOUR market'...is so crucial. That is why we are the experts! We need to be tuned in to what the 'right price' is in our markets. I did not learn that math formula in school...but it sure adds up!

GBU, BB!

Posted by Elizabeth Nieves, Bilingual Raleigh - Durham North Carolina Real Estate Team (The Elizabeth Nieves Realty Group) about 11 years ago

great post.  I use a very agressive pricing strategy.  If they want to sell, and do not need to sell then I am not taking the listing.

Posted by Highland Beach Condos David Serle, Boca Raton Agent David Serle (RE/MAX Services) about 11 years ago

Renee Burrows brings up a good addition I think.  

"do you want to possibly chase down the market?"

Thanks Renee!

Posted by Caleb Mardini about 11 years ago

Thank youHello! Thanks for stopping by to visit and leave me a comment yesterday! This is a great post... homes will sell at the right price! Getting the sellers to do this is tough sometimes. Have a great day! Brenda :)

Posted by Brenda Tressler (Crye-Leike Realtors) about 11 years ago

BB: The right price is what the MARKET DICTATES, which is low right now, and of course sellers don't want to hear it. OR, what Yvette said, "What the buyers are willing to pay."  Just my 2 cents.

  

Posted by Kat DeLong, Realtor DRE#01235311, Lake Arrowhead Real Estate ( (LakeView Realty Enterprises, Inc) about 11 years ago

Hi guys. Great comments!!! Renees comment also got me thinking of how doing lots of BPOs is a great way to become a pricing expert. They've always seemed like a waste of my time but I guess if you do enough of them, not only can you make some good money, but you will also learn your market inside out.

Most of the sellers in my market understand market conditions. The issue is finding sellers who ate in a position to sell. With values down over 50% in the last 18 months most are upside down. It's a very difficult market in Poinciana Florida.

The "video" tour was made with http://realestateshows.com

Thanks everyone for stopping by. Now go sell some houses!!!!

 

 

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 11 years ago

BB - Amen! - I couldn't have said it any better myself. I have also come across sellers who recently had listings expired and told me they never saw a "Market Analysis". What's up with that? I have to wonder if where the heck thos agents got their licenses ...K-Mart ...blue light special??? I think this is outrageous. Last listing I took, I noticed the previous agent had 60 listings - I guess she felt if half of her listings sold she'd be doing good! There should be a law requiring agents to provide a CMAs. Until then, it's just plain unethical to not provided the data to help a seller make an informed decision. Is this at least a matter of ethics?    

Posted by Carol Culkin, Overland Park (Reece & Nichols) about 11 years ago

Bryant,

Yes, that seems to be the new math.  I would say it is, "How low can you go without bringing money to the close"?

Posted by Fran Gatti, Managing Principal Broker - RE/MAX Integrity (RE/MAX Integrity) about 11 years ago

Bryant,

Thanks for the post. Price point positioning is really the focus of the day. The challenge is getting the seller and buyer to a reasonable understanding of this approach. Sellers still think the prices are too low and buyers conversely, still think there's a far lower bottom to be realized.

Posted by William Collins, Property and Asset Management (ERA Queen City Realty) about 11 years ago

Fantastic post. I could not say it better myself!

;)

Posted by Betina Foreman, Realtor, C.N.E., with WJK REALTY (WJK Realty) about 11 years ago

BB - as usual you know how to give to 'em straight up! This will be going out to my readers too! Thanks for saying it so well. Now gotta go sell some houses :) {hugs to you and TLW - thinking of you both}

Posted by Cyndee Haydon, 727-710-8035 Clearwater, Beach Short Sales Luxury Condos &Homes (Charles Rutenberg Realty) about 11 years ago

I agree, Bryant!  You have to look like a good deal in this market to get the buyer's attention...first in the door....then monitor feedback as well and do adjustments as needed to stay competitive with the other similar properties offered for sale.  It's more about competition than comps!

Posted by Debra Kukulski, Broker Associate, SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL (RE/MAX Suburban) about 11 years ago

As usual Mr. BB, you have said a mouthful... we find in our market that many sellers feel that they should be getting 10% MORE, not Less, than the comparable houses that have recently sold... and they dont sell when priced that way... our firm declines such listings. And our buyer agents do tell the listing agents this exact thing.

Never the less...

Great post!

 

Hope you are weathering the storms well...

Posted by Paul Silver, Rhode Island full service real estate firm about 11 years ago

You are right on point, as always!  I love the math, I will have to quote you, hope you don't mind!! :)

Posted by Anna Little (Greater Atlantic Shores Properties at Atlantic Shores Cooperative) about 11 years ago

I wrote a post about why a listing expires just about two weeks ago and I said the same thing. It all comes down to price and if you look at what has sold and what hasn't the expired ones are always more!

Todd Clark, Helping Families Home - www.IFoundYourNewHome.com

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) about 11 years ago

It's amazing to me that so many agents walk into a listing appointment, get the listing, and the SELLER actually tells the agent what the price should be! Unbelievable, especially in this market.

Posted by Tracy Santrock, Raleigh - Cary Realtor/Broker In Charge (Fonville Morisey/Santrock Realty Group, Inc. ) about 11 years ago

Tracy, I so agree with you, yet I see it happen all the time.  Price counseling is one of our most important services.

Posted by Debra Kukulski, Broker Associate, SRES;SFR,CDPE;GRI;ABR;e-PRO Realtor, Northern IL (RE/MAX Suburban) about 11 years ago

Hi all. Sorry I've been such a bad blog host this week. Between spending time with TLW at the hospital and running my business I'm just running out of time. BUT.....I am reading each and every comment and as always appreciate you stopping by. THANKS!!!

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 11 years ago

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