| PRICING YOUR HOUSE TO SELL |
| An unfortunate fact is that most home buyer's use PRICE as the number one criteria in deciding which homes to visit and consider. In order to attract the most consumers to your home in the crucial first month, you need to carefully select your asking price. Also, it is important to remember the high school economics lesson of supply and demand: "the more demand, the higher the price" and it's inverse, "the lower the demand, the lower the price." Upon first offering your home for sale you will experience the most activity. This is because potential buyers that are CURRENTLY SEARCHING will express interest. Real Estate Agents and those looking on their own will contact you or your listing broker in response to the initial advertising campaign. After two or three weeks, all of these possible buyers will have either visited your home or (according to their own price requirements) decided not to visit. After this period, the only potential buyers will be those newly arriving in the market. Even if you reduce the price after this time, the original consumers will NOT reconsider your property, even if you have reduced your price to their target price range. On the rare occaisions that they do return, they will demand even sharper reductions and negotiate with the idea that YOU are DISTRESSED. This is because they know the pool of potential buyers has decreased, degrading the potential sale price of your property. This is the Law Of Supply And Demand in action. The chart below was created using Long Island Board of Realtors' Multiple Listing statistics for the City of Long Beach, January 1, 2006 through June 30, 2006. The Vertical Axis represents Percent of Asking Price, the Horizontal Axis represents Time (Days on Market). |
| As you can see, at 30 days seller's are receiving 98% of their full asking price, with a steady decline to under 90% (on average) at 90 days. The spike at 120 days is a reflection of price reductions. What I find most surprising, and part of the current market dyanmic, is that fully 50% of homes sold have been on the market for more than 90 days. Only 33% sold in the first 60 days, with another 17% selling in the 60 to 90 day period, and nearly ONE THIRD of all sales are of homes on the market for MORE THAN 150 days. |
| More on Pricing: 1. Do Your Own Research. Attend local Open Houses to compare similar houses in your neighborhood. Remember, in the marketplace, these homes are your "competition". Read the Real Estate columns and articles in your local newspaper. 2. Find out what the actual "SOLD" prices are in your neighborhood. If you live in Nassau County, New York, I can provide you with up-to-date sales information (click HERE). 3. Ask an Expert. Pay for a professional appraisal or ask a local Realtor to do a Comparative Market Analysis (CMA). I provide an On-Line CMA for residents of Nassau County, New York (click HERE). 4. Be Objective Regarding Condition. Buyer's expect a modern kitchen and bath. A roof is a roof, recently replaced or not. Poor condition (the need of a new roof/kitchen/bath/whatever), will impact the price of your house negatively, but recent improvements do not necessarily create higher price value, rather they bring the house "to par." |
| Terry Woods is a Licensed Realtor with Prudential Douglas Elliman Contact him at 516/650-1121 or email: Terry @ TerryWoods.com |