How do you price properties in this market?
When a seller tells you: "Make this property fly!" how exactly are you going to do that?
With absorption rates of 2 to 10 years in most of our markets, how exactly do you price property in order to sell it fast?
Say a property has been unsuccessfully marketed by another agent at $ 500,000, in an area where the absorption rate is over 3 years. You pull the current comps and they indicate a value of $ 370-$ 380K. The seller says: "Make it fly! I don't care how you price it; just price it so you can sell it within 60 days, and then JUST DO IT!"
What would you do? How would you price this property?
17 comments • Myrtle Beach Real Estate by Mirela Monte • September 29 2008 11:00PM
I am so looking forward to your input!
Hi Mark!
I needed help... I figured many great brains are better than one...
Hi Mirela;
Very good question. I would price it at $350,000 for a quick sale.
Mirella -
My thought is simple - any property, in any market, will sell if the price is right. It just might get ugly.
Stage it well - make sure it is pristine.
Then, price to start at $369M. Reduce in brackets every two weeks until you get multiple offers. First, $349M, then $329M, $309M, $299M.
The key is to do this systematically, and quickly - before damaging market time begins to increment.
I'm not a big fan of "incentives." Price is the key!
My thoughts anyway, and how I have had success in this market.
But, most likely, it won't be a joyous closing.
DEAN & DEAN'S TEAM CHICAGO
Dean: You are da Man!
Thank you! That was very good! I appreciate it very much!
Anthony: Thanks!
Considering their need to sell it I would inform them to price below that estimated 370K and move it. What is else do they have for an option. The home can be in prime condition and I am sure it is but it wont move if the comparables are well below them.
Stanley: Below $ 370K, but where exactly? And how often do you implement price drops in order to move it? Remember, the Seller told you:
"I don't care how you price it; whatever you tell me, I will accept, but I will expect you to sell it within 60 days!"
Mirela, if they want to beat the absorption rate typical for the area then it has to be priced below market. The further down, the faster it would sell. No one has a crystal ball and can AUTOMATICALLY guarantee a sale in 60 days.
Thanks Gary! He does expect me to make it GONE, crystal ball or not. Considering that, what would YOU price it at to start with?
A very tough question. Even with price reductions, in my secondary home marketplace, where the buyer is in charge of the "where" and the "when", there's no guarantee that a price point will deliver action. We seem to be in uncharted waters, here. The 21st century model?? No roadmaps???
Ok Mirela, where is the property and Ill tell ya what I think it should be listed for! One piece of advice...I would be cautious in this situation...if you gotta make it gone in 60 days and comps are 380, then it needs to be like 339,00 to really stand out!
but, even at that price, it could be hard...especially if it is a condotel..cuz as you know, ya almost have to have cash to buy them!
Dean nailed it at $369,900. It will take you under the 370 mark on the searches. But, it has to show better then the comps that are active. So staging might have to be a consideration. Question is will the seller have to bring cash to the table and if so can they?
Jeremy, you obviously know our market. I'm with you on that price as being much closer to the mark! Good job and thank you!
You're right about the condotels, and lately they all seem classified as condotels... If it has Resort in the name, or it has on site property management, or ....
Larry: I am a proponent of the pricing bars: ex: 100, 150K, 200, 225, 250 etc. When a home could capture two price points, such as the $200K mark, I price it at $ 200,000 in the MLS but market it everywhere else at $ 199,900. That $ 200,000 price point puts it on two searches in the MLS: the up the $ 200K and the $ 200K and above. It works well.
Li: You're right! These are uncharted waters... That's why I'm asking for help.
Recently we've had an appraisal come in at $ 164K, when every comp in the building was between $170K - $ 210. The appraiser justified the lower appraisal on the current listing prices, some of which were at $ 140K. OUch! The agent had to renegotiate the price, right before closing....
Mirela - It looks like you received some good advice here. Let us know how it turns out! :)
Debi: Yes, I sure have, but I'm still looking for more. Care to impart some?
Mirela - don't overlook Dean's advice to stage it well. No matter what the listing price, it's about the perceived value in the buyer's mind (it influences the appraisers, too). Staging will always make it stand out from the comps. I would add to make sure the photos on the MLS are perfect. Buyers are shopping on the internet.