Price the House Correctly...

Knowing how much you can get for your house is very important...



First of all, you have only one chance to price it correctly. Certainly, you can argue that if no buyers come, you can lower the price...But, the fact is pricing incorrectly results in



1. Asking too little

2. Asking too much and loosing money (mortgage payments) and time...



Let me give you an example:



In Summer 2007, I got clients/listings on 2300 N / 3186 W, Clinton, Davis County, UT. Back them (since market changes monthly, and daily sometimes), I recommended them to price it for $243,000. The house in front of us (I believed in a clearer condition) got sold for $245,000 few months prior. Being on the market for less than 2 weeks, we got an offer (1st offer) for $238,000 with all other conditions and buyers' financial situation, I recommended to take. My clients informed me than less than $245,000 they would not consider anything. Knowing and informing my clients that it is quite difficult to get what you ask for, back in summer 2007, it was not impossible yet; however, if we were beoynd summer/early fall selling season, it can be late. Too more weeks later, we got offer (2nd offer) for $250,000 with $5,000 concessions/seller would pay $5,000 towards buyers' closing costs. I had more doubts about financial situation of these buyers, but having full price offer on hand, my clients wanted to take it.



At the end, this offer did not go through because of buyers' financial situation. I started loosing faith that in late September and changing market, I can bring someone else for full price offer. I suggested buyers to hire someone else if they think $245,000 is the only price they intend to receive. (they should have ask for $250K if they wanted to get $245K) In early September, I cancelled my contract and relationship with these clients for this and few more reasons. Letting go is smarter sometimes that keeping something which is not working.



In early October, 2007, clients hired some other agent. Asking price started decreasing slowly from $245,000 to $238,000. Only in late January, 2008, (4 months later), they got an offer (3rd offer). And, a week ago (2/20,2008), it was finally sold for $237,000 and 7,110 concessions.



So, the moral of this story is compare what would have been better for them. $238,000 was more money than $229,890 no only because it is more, but also because it came sooner with other better conditions. And, if the goal was to receive $229,000, we could have achieved it faster than 4 months.



1. Offer number 1, which came in 2 weeks OR 1. Offer number 2, which came in 4 mos

2. $238,000 no concession=$238,000 2. $237,000-7,110 = $229,890

3. No more mortgage expense, and ability to reinvest 3. mortgage expense for 5 months

the money same summer before school year started no money to move. rent in a new place

(these clients needed to move either way before in addition to mortgage expenses.

school started)



It is important to be realistic about your goals when pricing the house, and very important to estimate other possible expenses and time, plus stay informed what is happening with market during your listing.