Common Pricing Errors

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Common Pricing Errors

COMMON PRICING ERRORS by Steve Blank

My career in real estate began at nine years, cleaning yard signs for my dad’s firm. After graduating from DU in 1975, my career was in full force. With all the advice on how to price your home, I would like to offer some clues on what NOT to do.

 Your property value is determined by what a buyer is willing to pay today by comparing your property against the competition. Your buyer’s realtor will provide an overview of recent comparable sales to help evaluate what to offer. The buyer’s realtor will show them your property’s listing history, revealing the length of time on the market and any price reductions. An excellent guideline is; the longer a property sits on the market, the less it will sell for. Correct pricing makes you more money.

Common Pricing Errors:

  1. Start high – we can always come down. It takes longer to sell for much less money. Price it in the middle of your competition. This market is price sensitive; if you must sell quickly, price aggressively. View the properties you will be competing against.
  2. You paid $400,000 for the house. Your house will sell for today’s value. It does not matter what you paid. The buyer is comparison shopping.
  3. You need to get $400,000. A buyer doesn’t care…AT ALL. Today’s buyer needs to feel comfortable about the investment.
  4. You can’t rebuild my house for $400,000. True, however the replacement value is only important to you and your insurance company.
  5. My tax assessment is $400,000. Don’t place faith in a 2 year old evaluation premised on a computer person who has never seen your house.
  6. Your neighbor thinks it’s worth $400,000. Is your neighbor a doctor or maybe a plumber? Not to be funny, but would you ask me to fix a broken leg or your kitchen sink?

It’s uncommon for the real estate market to be in perfect balance. It’s either a buyer’s or a seller’s market. The buyers become frustrated in a seller’s market, while sellers get discouraged during a buyer’s market. However, most sellers buy after they sell, thus getting to enjoy becoming the buyer. Price your house to sell, then you can buy (with ±5% interest rates).

Steve Blank is a Managing Broker with Fuller Sotheby’s International Realty.

Downtown Denver
Writer Square
1512 Larimer Street #46R
Denver, CO 80202

Email: steve.blank@SothebysRealty.com

 

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