Several years ago, one of our clients, who was also a good friend at the time, told us his theory on pricing a house for sale at the right price. He and his SO asked us to discuss listing their home and so we considered a potential pricing structure.
In his vast experience (this being the first home he had ever purchased meaning it was also the first he had ever sold), he revealed to us his theory on getting to the right price.
If a property sold in less than one week, it was priced too low and if it took more than a month, it was priced too high. I’m sure there are more people who think that, then are grateful for a quick sale.
So it came as no surprise when recently, the neighbor of a different client (B) was both shocked with disbelief and spouting similar thoughts to B, who’s home sold the first weekend it went on the market – in a buyer’s marketplace.
Afterall, the neighbour’s house had been on the market for several months. She had already experienced several price drops, and still, her property sat. She claimed the sale couldn’t be true. Hers after all, had more finishes and was a competitive property to the one we helped to sell.
It started out priced too high, just above our listing and had a few more amenities (finished basement, more bathrooms, and a bigger kitchen).
To sell in one day, our client’s property “had to be under-priced”, even with fewer amenities.
And if you agreed with our friend from a few years earlier, you would think the same.
But they would both be wrong – in a case of flawed logic.
The illogical assumption was that every buyer will wait an appropriate amount of time, either before or after viewing the property and then and only then, make an offer.
If the property was too high, the buyer will wait another arbitrary time frame for the property’s price to drop and then come swooping in to make an offer. But, that is not reality.
When a buyer has been looking for the right property for them, and it appears on the market, they will jump to see it immediately, afraid to lose it to someone else.
If a property meets their price vs amenity expectations, they will make an appropriate bid on the property and hope to negotiate a deal that works for them. Instant win-win.
You see, properties that are priced right and well presented for that price, often sell quickly.
Add to that – location. If the property is in a desirable area it may have many potential buyers who have been looking, the minute it goes on the market. That doesn’t mean that a property that is well-priced and presented will always sell the minute it goes to market. Sometimes, the right buyer is not looking yet.
And, sometimes, you only get one buyer and one offer, and you deal with it, whether that happens the first weekend or the sixth weekend.
What I strongly suggest is this: if you overprice a home or present it as less than the asking price demands, it will sit for a while.
It will sit until you lower your price or change the presentation, or both. Then you risk becoming stale. That happens too.
Hopefully by that time, you haven’t missed the right buyer who found a property that was priced and presented accurately.