Market Insights: Pricing your property
Editor’s note: This is the first in a three-part series concerning pricing properties.
Figuring out what price to place a property on the market is probably the biggest challenge facing sellers of Summit County real estate in this shifting market. Over the past year it is a topic readers have asked me about several times.
Question 1: One reason people like owning stocks is, if needed, one can “cash in quickly.” TRUE. If you own stocks and want to liquidate today you say to your stock broker, “Sell,” and your stock is sold at the current market value. Simple.
Question 2: A big downside of owning real estate is there is no certainly as to how long it will take to sell. It could take over a year. FALSE . If you own real estate and want it sold you should say to your real estate broker, “Sell,” and a top-quality broker will have your property under contract in three weeks at the current market value. This is the approach most banks take. But this is not the approach most real estate owners take. Most people say, “Gee I want to sell but only if I get $xxx,000” That approach does not work.
When real estate is priced it ends up in three categories. In the flow. In the show. In the stagnant mass. In this article we will discuss the first category, the stagnant mass, with the other categories covered in over the next two weeks. What happens when you dive into a pond on a boiling hot summer day (something we just never have in Summit County)? The water close to the surface is warm while the water deep down is darn right refreshing. You keep plunging deep into the pond. That cold water is the stagnant mass, it just sits down there.
Properties that are in the stagnant mass are either:
1.) Way over priced based upon the current market values (96 percent).
2.) Such an extremely unique property that has very few prospective buyers (4 percent).
Question 3: Allowing a property to sit in the stagnant mass is the result of:
a) poor judgment
b) a lack of experience
c) unrealistic expectations
d) sheer stupidity
e) all of the above
Market insight for the week: If you have a property in the stagnant mass get realistic or get off the market. Buyers are astute and don’t even consider properties they view as being way over the market value.
Daniel Webster Johnson is a broker associate at Resort Brokers Real Estate. He can be reached at (970) 393-3300 or at daniel@Your
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