Getting the Price Right

This past couple of months we've seen an increase in sales and a leveling of prices, indicating to me that we've hit bottom and are now hoping to see property values on the rise. The inventory of homes for sale has dropped and buyers looking for specific types of properties are anxious to see what will be listed for sale next.


That's good news for buyers because prices aren't going to sky rocket anytime in the near future, allowing them to still get good deals at reasonable rates And it's good news for sellers, although they won't see the dramatic rise they were hoping for. Both the $6500 and $8000 tax rebates on a home purchase have expired, interest rates are slightly up, and we're back to basics.


Property listings are the life blood of all agents and we vie for each and every one. We hone our marketing skills and work to get the properties sold as quickly as possible and at the best possible price. Attempting to assign a current fair market value is where the science comes in. It may not be an exact science, like math or chemistry, where A+B always = C, but it's a 'science based on past sales and current trends, analyzed together, to come up with the best possible listing price for that property at that time. And we try to explain to sellers that equates to a reasonable place to start, may not hold up over the life of the listing. Price adjustments are almost always inevitable. As the market ebbs and flows, so do listing and sales prices.


But listing homes for sale is still difficult because most sellers don't want to believe the one universal truth...if it's priced right for the market, it will sell. If it isn't, it won't. Similar in some ways to the 'if you build it, they will come' theory for new construction, everything will sell over time if the asking price and the buying price make good economic sense. Recently, and probably for a long time to come, the lower prices made good economic sense to buyers...and threw sellers for a loop. No one wants to hear the reality that their home is worth less than they would like it to be.


None of us has a crystal ball. We can only follow trends and history. My approach to listing and selling property is based on data taken from the sales statistics and knowledge of the local neighborhoods. I look at what seems to be happening in each area of the county and specific neighborhoods and give the best information I can find to help with the pricing decisions.


Last week I saw that owners I'd been talking to for over 6 months listed with another agent for $100,000 over the sale price of anything else in their neighborhood. Apparently my counseling on fair market value and appraisal issues didn't make any difference once they found someone who would tell them what they wanted to hear. Sure their home is lovely and has lots of bells and whistles. But it won't appraise at anywhere near that asking price. I guess it's listed 'just in case' that one-in-a-million cash buyer, who's been out of touch with economic realities, happens to stop by. And the listing agent gets to have a good looking property on multiple public real estate websites and can divert calls that come in on this listing to other properties that make more economic sense.


And just yesterday an owner in my very own neighborhood listed with another agent at much lower than the price I recommended 12 months ago, and lower than what is currently fair market value, for sure. Last year they were angry with my assessment of value, thinking it too low. Now they have a listing agent who isn't familiar with the neighborhood, didn't take it's recent sales and location into account, and who has UNDER priced the home by close to 20%!


I'm obligated to supply buyers with information on recent comparable home sales when they are out looking to buy a home. And I'm also obligated to give the same type of data to sellers when they are ready to list their property. Why does one group value that information and the other find it appalling?