As I travel about the country teaching, I am hearing some good news about markets where property is selling if it is priced properly—it seems that we are getting better at price reductions and the market is responding.
In the past, in a rising sellers’ market, we used to price a property and wait for the market to catch up to it because prices were constantly rising. This is good strategy, if you are in a rising sellers’ market. But some markets are flat or still adjusting.
I have learned that a great strategy for a seller who is serious about getting his or her home sold is to price the property ahead of the market. In other words, if the market is rising, price higher than the last selling price and, if the market is declining, price the home slightly lower than the last comparable sale. Yes, lower.
We are also getting better at price reductions to meet the expectations of the market. Many sellers believe that reducing a $300,000 property to $295,000 can actually make a difference in a sluggish selling market. But that is less than a 2 percent reduction. So here is the question for that seller: “When was the last time you rushed out to the mall to a 2 percent off sale?” The message to drive home to your seller is, “We need to have a real sale, so how about 5-10 percent off for starters?”
Many sellers may be reluctant, but smart sellers realize the logic and marketing advantage a realistic reduction has, and it will more than likely bring results. And that is the goal for every client: results.
1. To get a prompt sale, you need to anticipate the market.
2. To overcome bad conditions, adjust the price.
3. To overcome a poorly located property, adjust the price.
4. To overcome a challenging sellers’ market, adjust the price.
Make no mistake about it, price sells. Get good at price reductions. It may mean the difference between success and failure.
Mike Selvaggio, CCIM, CRS, GRI, teaches CRS and Ninja Selling courses nationally and internationally. Reach Mike at Mike@Selvaggio.com.