PROPERLY PRICING REAL ESTATE

The Huntsville Alabama MLS history of recent sales is always the starting point to price a listing.  We review both what the comparable properties sold for and the number of days they took to sell. These factors provide a good indication of the neighborhood’s market value and current market trends in the neighborhood.

One must also search for active comparable listings to see what competition exists.

One rule of thumb is to price listings somewhere between the average sold price and a little above the highest sold price while staying within the range of active, competing listings. Where within that range to set the price depends on the property’s condition, how well it shows to prospective homebuyers and the owner’s degree of urgency to sell.

When a property is first listed on MLS, both realtors and the public will quickly find the new listing through manual and automated MLS searches. The property will usually get the greatest attention and showing traffic during the first several weeks of being on the market. It is critical that the property be properly priced, prepared for market and staged for showings during this peak period.

The danger of pricing real estate too high.

We were working with international buyers from South Korea when the husband made an off hand comment that someday he would love to own a home on a lake. He didn’t think they could afford such a home but we began to search for them.

We found a gorgeous home in a lake community that been on the market for many months. At the time he put the house on the market the seller was not in a hurry to sell. He  priced the house too high to test the market. The house did not sell during the peak showing period.

After a few months on the market the owner dropped the list price to what it should have been when it was first listed. Since the peak traffic period had passed, showings and potential buyers were few and the house still did not sell.

At this point the owner had moved out of state and was maintaining another household. He was still making mortgage payments, paying homeowner association fees and keeping utilities on at the house he was trying to sell. The seller began to experience some financial stress and lowered the price again, this time to lower than the home’s market value.

This is the point where we arrived. The house was still priced above my client’s price range. We researched the homes’ listing history and saw how long the property had been on the market and noted the steady progression of price reductions.

We made an initial offer, a good bit lower than what my client could actually afford and asked for more seller paid closing costs than we really expected to get. The seller countered and our negotiations began.

During negotiations the listing broker inadvertently gave us way too much information. We learned the seller was experiencing severe financial stress and that his insurance was about to be canceled because the home had been vacant for so long.

We knew we could negotiate very hard.

Our clients were able to purchase their dream home at a price that amazed even us. We felt sympathy for the seller but our responsibility was of course to our client.

Had the seller properly priced the home when he first put it on the market. The house would have sold in a reasonable time and at a much higher price.