Proof that Price Matters

Posted on August 26, 2010 by Jim

I’ve said many times that pricing a home to sell means pricing it right from Day One. Now, Redfin provides statistical proof.

After the first month, a home is in pergatory

Damn, it’s easy for me to say, “price your home right,” when I’m not the one faced with the life decisions that you or my clients are. But that’s what sellers in the Charlottesville area and virtually every other market in the country are facing – life decisions. College funds, retirement funds, the 20% downpayment saved and put down on the house you’re now trying to sell – gone.

It’s never easy to tell my clients “I know you bought for $400k, but if you want to sell and move on, you need to put your house on the market at $335k in order to 1) beat the competition and 2) be priced for the market” – two similar but different dynamics – but it’s much harder to act on this advice. Not everyone is prepared – psychologically, emotionally, financially – for a short sale. Not everyone can come to terms with the fact that they’ve lost the bulk of their life savings.

We’re not in an easy real estate market. There are absolutely buying opportunities in the Charlottesville market; but in turn there are greater pockets of pain for sellers.

All I can do as a Realtor is advise my clients and potential clients of where the market is and how they fit into it. I don’t set prices (nor do other Realtors) – the buyers and sellers do.

Price it right from Day One. I can help.

More at the WSJ.

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  • http://www.somdexpert.com Jonathan Benya

    Amen brother! Thanks for sharing this, I would have missed it otherwise as I’m not much of a redfin follower. This is an argument that I see constantly, and it’s nice to actually see statistical proof that can be shown to clients.

    • http://realcentralva.com Jim Duncan

      Yeah – nothing like hard, visual data to compel folks to be realistic and rational … when they can afford to be.

  • blahville

    Can an agent in Charlottesville win a listing if they tell a seller who bought 2005 or later that they can’t sell for what they owe on the mortgage?

    Any insight on how this discussion happens when a seller begins interviewing potential listing agents?

    • http://realcentralva.com Jim Duncan

      The short answer is “it depends” – I’m going to be answering this question this week via video.

    • http://realcentralva.com Jim Duncan
  • GREG

    Jim – Loved your advice to price it right from day one. I was a buyer in the CVille in the 2008 and 2009 market who was unable to agree with multiple sellers who were unwilling to lower prices even 5% off asking – and these were nearly all for homes over $750k. For whatever reason, sellers believed that their homes were worth much more than the market would dictate. Ultimately I left Albemarle County and moved away, quite pleased to move to a market with more rational sellers (and purchased a home immediately). What strikes me still is the sheer magnitude of homes today in the Charlottesville area still asking above 700k. Sellers still don’t get it. Really, one need only ask themselves, which employer in town can pay the salaries required to pay the mortgage on a home above $700k? I still follow the market in Charlottesville and frankly, I’m astounded at the constant homes coming on the market above that price range. I guess people can still dream. Keep up the great work.

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