Well at the beginning of the month I beat up on sellers telling them that they must face reality. I must soften that a bit and admit that saying that is easier than doing it. I understand that pricing a house that has been your home is not only a business decision, but also an emotional/personal one. So when the market stats and the advice of a professional real estate agent should be the pricing gauge, you find you have to fight an overwhelming drive. The urge to let other factors influence your home pricing. Factors such as how much you owe, how much money you need to move to your next house, how much money you put into improvements, and more. None of this will cause your house to sell for more than a buyer will pay.
You would think as an investor, I would not be susceptible to these things. I should be looking at this from a purely business perspective. I am trying, but I am struggling. The problem my husband and I have is that if we go much lower we will have lost money on this house that we so carefully remodeled to resell. Ouch.
I ran the numbers, I looked at the comparable properties and I still think compared to other homes it is priced well. But in the small town it is in, it is entirely possible that the whole town is overpriced. Other homes have also lowered there price, but with none selling.
As Jeffrey Otteau of Otteau Valuation Group, Inc in East Brunswick, NJ says, one of the “undesirable effects of Over Pricing is that marketing time becomes extended, which serves to delay the sale, eliminates all sense of urgency and will eventually lead to price reductions.” Otteau offers workshops for real estate professionals with market forecasts and other helpful topics.
I have heard this from Jeffrey a number of times, and my broker has coached me. I know that the best way to price a house is what Jeffrey Otteau calls “right pricing”. You set you price lower than the competition and you will end up with a faster sale and a higher price. It is tough to swallow, but studies show it to be true.
So did I practice what I preached? Not too well. What will I do? I will make another price reduction on Monday. Check back here for the closing party when I sell it.