Taste Tuolumne

Musings on Food, Fun & Real Estate in the Mother Lode

The Power of Price

Fact – homes that are priced right sell. Yet, time and time again I talk with Sellers who want to list their home well above market value. Their rationale? “Buyers always lowball so we need to start high.” Sounds okay in theory but the problem is that the numbers tell a very different story. Take a look at the Tuolumne County stats for last year: 

  • Help-U-Sell Golden Hills Realty’s listings sold, on average, within 97.26% of the asking price.
  • The MLS listings sold, on average, within 94.75% of the asking price.

(At only 2.74% & 5.25% below asking price, respectively, there’s nothing “lowball” in these figures.)

  • 30% or 188 out of the 623 residential listings that sold were at full asking price or above.
  • So far this year it’s pretty much the same. 29% or 36 of the 125 residential listings that sold were at full asking price or above.

So what about the listings that are priced much higher than market value? They typically sit on the market until a price reduction (or 2 or 3) finally gets them close to market value. Or, they expire. What we’re seeing with Buyers is that they consider it a “waste of time” to make an offer on an overpriced listing. They’d rather wait for the sellers to “get real” on price before making a move. In fact, often times they won’t even look at an overpriced listing let alone make an offer.

Back to the stats:

  • Of the 188 homes that sold at or above the asking price 85 had at least one price reduction in the history of their listing.  Average days on market? 208*
  • Of the 188 homes that sold at or above the asking price 103 never did a price reduction. They were priced right from the beginning. Average days on market? 64*
  • So far this year, the figures are very similar.

And when the Sellers never “get real” on price? They don’t sell.

  • 646 listings expired in 2010. So far this year, 169.

Moral of the story- if you price your home right it will sell. If you price it right from the beginning of the listing it will sell faster. In a declining market, selling faster equals more money. A home will sell for more money on day 1 of a listing than on day 208. There is power in pricing a home right.  

*for the purposes of calculating the Average Days on Market I did not include the short-sale listings as the Days on Market can be exceedingly long and skew the numbers. Souce of sales data: TCAR MLS.

 

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This entry was posted on March 21, 2011 by in Help-U-Sell, Sellers.
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