If you are like me, buying a car is a long process. First I have to want a new car: then I have to look at cars to decide what I like that I can afford. Once I zero in on a particular price, I then look and drive cars looking for the car that feels like me. Yes, I know I am weird, but aren't we all?
In this pretend story, let's say I decide a red sports car convertible is THE one for me. Because I can't afford a new one, I decide a pr
e-owned Saturn Sky convertible will meet my needs. I go to the Saturn dealer in town and tell him, "Bring me a red Sky convertible." He laughs at my eagerness, seeing dollar signs, and takes me to the pre-owned lot. And there it, or they, are. Yes, two red Saturn Sky convertibles! They both have the same equipment, the same interior, the same engine and the same mileage within 200 miles. They are both local cars and have the same manufacturer's warranty remaining.
Trying to remain calm, I ask the standard question, "How much?" And this is where the similarity ends. One object of my love is $21,500 and the other is $19,500. I ask the dealer about the difference. His response is unexpectedly honest, "We paid more for the $21,500 car than we paid for the $19,500 car."
Examining the cars again, I am satisfied they are the same except for the price. I want this car, which one do you think I will buy? Of course, the $19,500 one; I'm no dummy. I don't care what the dealer paid for the car, I want the one I can get for the least amount of money. Naturally, I haggle over the price and get it for $18,750 with special spinner hub caps thrown in for free, but at least I am haggling over the least expensive of the two cars.
What does this have to do with the sale of your 3 bedroom, 2 1/2 bath, two story with fenced in back yard, beautiful landscaping and fresh paint and carpet? Not much except there is another 3 bedroom, 2 1/2 bath, two story with fenced in back yard, beautiful landscaping and fresh paint and carpet for sale three streets over in your same neighborhood!
So when a potential buyer walks on to the real estate sale lot and is shown two houses with the same characteristics, they will ask, "What is the difference?" If the only difference is the amount you paid for your home versus the competition, be prepared for the potential buyer to say, "I don't really care what you paid for your home, I'm going to buy the one that is least expensive for my family." Of course, they will make an offer on the least expensive home and your home will stay on the market for a few more days or weeks if there are other similar homes on the market similarly priced less than your home.
The lesson is quite simple. You have two choices: price your home to sell in a relatively short period of time or price it to sell in a relatively long period of time. Your real estate professional can do a comparative analysis of the houses sold and currently on the market. This will help you price your home in line with the competition. Of course, your real estate professional will help you prepare your home so it is perceived to be different from that other home, but of course so will the other real estate agent.
Remember, home buyers will buy to satisfy their needs and wants not to satisfy your needs and wants. If you don't have any showings in 10 days or if you have 10 showings and no offers, you have priced it too high. Either take it off the market or reduce the price!
Price is not everything, but it is real high on the list!
Good Luck on selling your home. Contact me if I can help.
http://BuyMiddleTennesseeRealEstate.com/
Sunday, August 5, 2007
Of Cars and Homes
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2 comments:
And of course the seller would have interviewed the agent thoroughly prior to listing their home to be assured that aggressive marketing would be done for their home.
It would also beg the assumption that the real estate agent would be frank with the Seller from the beginning so hopefully during the interview process the list price would be hashed out and in accordance with current market conditions.
Rebecca D. Levinson- http://www.connect2agent.com
Of course you are correct rebeccalev, the pricing should be worked out initially. In my Real World, sellers often have an inflated view of their homes value evidenced by the increased days on the market and number of price reductions seen. Most realtors are not willing to walk away from a listing they know is too high thus price reductions, increased DOM and lost opportunity.
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