“PRICING, PRICING, PRICING” IS THE NEW “LOCATION, LOCATION, LOCATION”!!

It’s true!  Though, location will always be an important component of real estate value, pricing has usurped its position as a stronger element for a successful sale.  It’s all about price!!  So, overpricing your home in this market is the “kiss of death”.  It is very difficult to determine pricing (and, no one wants to leave money on the table), but you almost have to run the comparable data and ignore it!  You should price below the competition and price to lure the reluctant buyer to the table.  The foreclosures and short sales are compromising the sale prices of homes in many areas and to be competitive the other sellers must respond.  Properties with the possibility of selling short of what is actually owed on the property are often utilizing formulas for price reductions.  The listing agent will consistently and incrementally drop prices until that property’s price hits that “sweet spot” in the market pricing continuum.  You know you’ve reached the sweet spot when the activity and interest suddenly increases and there are often even multiple offers.  Once a home has endured the actual foreclosure procedure, the banks are anxious to get them “off the books” and will try to price for a quick sale.  These factors, obviously, affects the pricing on homes that are not facing a short sale or foreclosure and must be considered in the market analysis. 

Pricing properties for market is always challenging.  There are so many components to determining at what price point a house may sell.  The usual elements such as size, age and neighborhood are definitely a consideration, alongside the more ethereal factors such as view, style and cosmetics.  Realtors utilize the RMLS web site (Realtor’s Multiple Listing Service) to view, compile and compare data on presently active listings, pending sales and recent sold properties. At present it is very difficult to compare due to one particularly overlooked element of full disclosure in our results and that is “seller paid concessions”!  These allowances can be in the form of loan points purchased by the seller to lower the buyer’s loan interest rate, a buyer’s closing costs paid by the seller, etc.  In a marketplace where pricing is already made more difficult due to a lower number of usable comparable “solds”, there should be more transparency in the amount of financing concessions.  Our local RMLS should consider a category for seller paid monies.  This would benefit sellers, buyers, appraisers AND Realtors!