The Benefits to Sellers of Proper Pricing

Pricing your home properly when you list it for sale is critical. The cost of not doing so will be disastrous!

Here are two great examples that illustrate this point:

In August, we were referred by past clients to a young couple with Microsoft that was relocating out of state. We had visited the home in person and gone through it with the sellers, observing its features, condition and making recommendations that would help improve its curb appeal and interior finish/salability (most of which they did).

We then did a very careful market analysis and came back to them with a recommended price range of $500k to $520k. Our analysis compared like-homes within a 1/2 mile radius that were actively listed, pending sale and had sold within the last six months. We made adjustments for condition, upgrades, curb appeal, appreciation, etc to arrive at our price range.

We lost the listing to another agent who promised the sellers that he could get them more money. The clients chose an agent who told them that they could get $569,950 for their home, despite the fact that there were no comparable sales to support this price. The clients failed to remember an important point we stressed to them - that the market sets the price, NOT the agent. What buyers were willing to pay for similar homes is always the most reliable figure in setting the price. Sure, adjustments can and should be made for upgrades, better location, etc, but what buyers have been paying should always set the baseline.

We warned the sellers that over-pricing would lead to their home becoming "stale" on the market - buyers and their agents research pricing and know when a home is over priced. These homes also gain a stigma of a problem property - think about it - what would you think about a house in good condition, in a good location, in a hot market (a five minute walk to Microsoft, no less...Hello!!!) that just sat and sat, unsold for months? Maybe there's something wrong with it? Of course you would!

In any event, we checked back on the house last week to see if it had sold. As we suspected, the house was still for sale - now for just $500k - and over 120 days on the market. Yesterday I noticed that it had finally gone under contract and was Subject to Inspection. I'm just waiting to see how much it actually sells for. One thing I do know - it will sell for considerably less than it would have if it had been priced correctly from the start.

Not only will the sellers make alot less profit on the home, they've also made four months worth of mortgage payments on a house that was sitting vacant. They also had to pay rent in their new location and won't be able to move into a new home until they can close on their listing here in Redmond. So much time and money has been wasted, because they chose to ignore the facts and believe an agent who couldn't back up his pricing strategy (and also had NO other active or recently sold listings - this is a warning sign, folks!). Hey, we all want to get the most for our homes when we sell them and I'm no different. But, you can't ignore the facts, either!!

On the other hand, at just about this same time, we were referred by my sister and brother-in-law to friends of theirs in Bothell. Once again, we went through a careful evaluation of their home and did a careful market analysis. Interestingly, the price range we set for their home was more than what they thought it could fetch. We loved what the husband asked when we showed them the price range - he asked "why" we thought we could get a higher price. Once again, armed with the facts, we were able to reiterate the data supporting our position.

After interviewing 3 other agents, they called us to list. The other agents had come in with wildly different prices. Some much higher, some much lower (so always interview at least 3!!!). Convinced that we had the right data, they agreed to list with us in the range we suggested and made the changes we recommended so the house would look its best (a little paint, a little de-cluttering, a good, thorough cleaning to make every nook and cranny shine).

Within 20 days their home had sold - at a net of 99% of the list price (they paid some closing costs for the buyer). And even better - within 60 days from the day we listed their Bothell home, they had closed on their existing property and had closed on their new dream home - a beautiful and luxurious contemporary on acreage in Snohomish with a view of the valley. They wasted absolutely no time and no money paying for a house they weren't living in. They listened, observed the data and our recommendations and had a smooth and low stress experience (hey, we can't make it stress-free...this is real estate, afterall!)

The article below speaks again to the importance of proper pricing. Read it carefully and take it to heart - it will save you time, money, and stress the next time you need to sell your home.

The Benefits Of Proper Pricing

When your home sells faster, you save carrying costs, mortgage payments and other ownership costs. A quicker sale creates less inconvenience for you. If you've moved before, you know the energy it takes to prepare for showings: keeping the home clean, making childcare arrangements, and altering your lifestyle. Proper pricing reduces these demands on you, by helping your home sell faster. At market value your home will gain exposure to more prospects that can afford the price.

Sellers who list at a high price are looking for that one buyer who will pay it, often not realizing that they have discouraged many potential buyers who could have afforded the home. The final sales price is probably one that will be affordable by more purchasers. This is because sellers many times accept a much lower price at a much later date since that one buyer willing to pay the higher price never comes.

When salespeople are excited about a home and its price, they make special efforts to contact all of their potential buyers. Knowing that it is priced properly for its market, they expect it to sell soon and encourage their prospects to act quickly. Their excitement is contagious!

Ad calls and sign calls to REALTORS® turn into showings when price is not a deterrent. Most serious prospects are well educated about asking prices in the areas they are seeking. They will not waste their time on a home they consider overpriced. Buyers fear they might lose out on a good home when it is priced right. They are less likely to make "low ball offers." Better pricing attracts multiple offers!

Bottom line, if a home is priced right, the excitement of the market produces higher sale prices. You net more both in terms of actual sale price and in less carrying costs.


We love helping people fulfill their dreams of home ownership and moving up to that dream or family home. Just don't call us if you plan on pricing your place too high - we won't list it and won't be a party to your heartache!

Happy house hunting,
Tim & Keith