Market Insights: Pricing property to be sold
Editor’s note: This is the third in a three-part series concerning pricing property.
Over the past two weeks, I have made the analogy that pricing property is similar to the level of water in a pond, as illustrated. The pond I have in mind in this analogy is located back east where the temperatures are sweltering all summer long.
The top level of the pond. You walk into the pond and the water isn’t even refreshing; it feels hot. This is the level I call “in the flow”, and these are the properties that are priced in line with recent sales, which are priced at the market value. They come on the market, have plenty of showings, the seller receives written offers and the property is sold within three months.
The middle level of the pond. This time, you make a shallow dive off the deck. You zip through the hot water into the middle of the pond and right away you can feel the difference in the temperature. This is the “in the show” segment of the market where the properties are priced 5 percent to 25 percent above the market value. These homes are getting showings – sometimes dozens of showings ¸- but no offers. What is happening? The buyers leave the property and make offers on properties that are “in the flow”. It is that simple.
The bottom of the pond. You say to yourself, “What the heck, I’ll give it a go and dive way down deep.” On this plunge into the pond, you reach the water that is actually cold. You are “in the stagnant mass” of water that circulates much less. This mass of water just sits at the bottom of the pond. Following my analogy, these are the properties that are priced way too high; they generate very little interest from buyers. In essence, these properties aren’t even being considered. The buyers and the real estate brokers overlook these properties because they believe the sellers are unrealistic.
So how can you be certain your property is priced “in the flow?” Very simple – work with a top notch, full-time, local real estate professional who knows the market inside out. You should be shown all the data used to determine your “in the flow” price, with brutal honesty. For many sellers, the next two steps are the hardest. Step 1: Trust the professional you have employed to market your property. Step 2: Make the decision to be “in the flow.” On occasion, for example, in an appreciating market (which Summit County is not in right now), it might be appropriate to be priced “in the show.” Never, ever price a property “in the stagnant mass”.
If you have a property on the market, ensure you are priced “in the flow”. You want frequent showings and offers in writing. If this is not the case, talk with your real estate broker today.
Daniel Webster Johnson is a broker associate at Resort Brokers Real Estate in Breck. He can be reached at (970) 393-3300 and/or Daniel@YourMountainBroker.com.
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User