Page 31 - Listing Presentation_Holland

THE HIGH C O S T OF

O VERPRICING

The most critical step in preparing to market a home is determining the listing price. All sellers want
to realize the highest possible return from their property. Pricing a property too low, of course, will
not provide the highest return; pricing a property too high will definitely produce less than the best
return. The right price produces the best return.

PROPERTY MIS SES IT S MARKET INCREA SED MARKET TIME
When a price is too high, those buyers for whom The overpriced house stays on the market,
the home would be suitable won’t see the house and statistics from the Multiple Listing Service
because it is out of their price range. Buyers who indicate that the longer a house is on the
are in the price range of the asking price will market, the lower the selling price in relation to
not see the property as a good value and will the asking price. It becomes a “stale listing.”
buy something else. A professional agent will be
reluctant to show the property, except perhaps O THER C O S T S OF O VERPRICING
to make a competing property look like a good A home on the market is a non-productive asset.
buy. Credibility is key with value and pricing. An unsold house represents financial resources
committed to continuing ownership costs:
TES TING THE MARKET Interest, taxes, maintenance and the loss of the
Sellers often feel that they want to test the potential alternative uses of the funds tied up in
market at a high price. This is risky. A property the property.
receives its fullest exposure in the first three to
five weeks on the market. The best buyers for NON-MONET AR Y C O S T S
any property are those choice prospects who An unsold house prevents the owner from
see a property during those first weeks. If it proceeding with whatever plans led to the
does not appear to be a good value, they will decision to sell: Purchase of a different home,
decide not to buy and it is rare that such buyers moving from the area, consolidating households,
or agents return to a property later, even if the liquidating an estate, concluding a divorce.
price is reduced.
C ORRECT PRICING
SELLER EXPECT A TIONS Pricing a home is part art, part science and
Another danger of testing the market is that the much knowledge. The pricing process should
seller will come to believe in what started out be based on statistical information: The prices
as an exploratory price. Even when the market paid for comparable properties in recent sales.
provides evidence otherwise, the seller will be Since no two homes are exactly alike, however,
unwilling to reduce the price. Or, what is worse, the evidence must be evaluated and a judgment
a seller may turn down an offer that is low, but reached. Because of the emotional attachment
which is the best offer that will be received. In to a home, the judgment of a Bennion Deville
an extreme example, a seller whose house was Homes agent with an impartial view is vital. The
listed at $550,000 turned down an early offer right price produces the best return – ALWAYS.
of $450,000; a year and a half later the house
sold only after the asking price was reduced to
$425,000.

HOLLANDGROUPPROPER TIES.C OM | BENNION DEVILLE HOMES | DRE# 0 17 3 5 2 40 | 0 1325548 COST.OF.OVERPRICING.20.07