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Market News and Trends, The Business of Real Estate

Price It Right to Make More


An article I found today on TexasRealEstate.com prompts me to revisit a topic that I mentioned a few days ago, and many times before:
Prevent your house from languishing on the market

The important quote from the article, and a frequent conversation in my business is, “Some homesellers think it’s best to start high. You can always reduce the price if you don’t get any bites, right?”

The answer, of course, is, “Yes.”  It’s your house.  But keep a couple of things in mind:

(1) It’s a fact that what you have “in” your house has almost nothing to do with what you can get “out” of it.  The market is the market, and in almost all cases buyers have choices.

(2) The right Realtor® to help you get your house sold is a professional who analyzes housing markets and prices homes every day.  His or her pricing consultation is meant to benefit you.

Now, here’s a fact about residential market positioning:  Homes that are priced right on day one sell faster and for higher prices than those that “start high.”  There are bound to be exceptions, but I haven’t found one yet.  I have tested this with all kinds of homes in many different market segments and different price ranges, and the result is always the same.

For today, I focused on houses, condos, and townhouses in the 5-county Austin Metro area that sold for roughly +/- 10% of the median sale price — $175,000 to $225,000 — over the past year.

First, here’s a look at properties that went through at least one price change before selling:

Austin Metro Sales $175K-$225K, 1+ Price Changes

That’s 1,559 homes that sold after an average of 119 days on the market for an average price of $192,273, or $97 per square foot.

Not bad, huh?  Lots of sellers would be thrilled to have their homes under contract after “only” four months on the market.

But take a look at homes that were priced right “from the git-go”:

Austin Metro Sales $175K-$225K, No Price Changes

This group was 1,330 homes that sold in an average of 36 days for $198,235, or $101 per square foot.

There is no question that these are large enough samples to accept the validity of the data.  If you really want or need to sell, why would you position yourself to spend more than triple the time on market just to sell your home for less.  If you are still making mortgage payments — or even if you’re just accruing property taxes — this is real money.  Not to mention trying to live in a “product” for months – no dishes in the sink, no spots on the tub or shower door, no wet towels , and figuring out what to do with pets for every showing.  Why would you make that choice?

Of course, the challenge is finding the “right” price.  Don’t drive around the neighborhood collecting flyers from all the overpriced houses around you.  Market analysis is a job for a professional.  I’ll be happy to talk with you about your specific situation.  Just give me a call.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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