Real Estate buyers always want to know about pricing. They often ask me, “will they take less?” and “how low can I offer?” I’ve been asked if I’m a good negotiator (see ARDELL‘s post on this one). They also want to know the average % of list the “typical” house in Denver sells for.
Hold on, let me get out my crystal ball. Omph, it’s in there, just a sec…
O.K. The average % of list a typical house sells for is irrelevant! Some houses are well-priced, others are way over-priced. Every seller’s motivation is different and affects the pricing strategy they take. Some sellers are moving tomorrow and need to get the house sold. Others haven’t even started looking for their replacement home and don’t have any urgency at all.
Buyers who identify the one, particular house they love are then able to have an intelligent conversation with me about what we should offer. We can go into the MLS in Denver and look at what price reductions they’ve had already (% of list for which price would they be wondering about?), how long the property has been on the market and what comparable homes have recently sold for. Now we have pricing traction.
No, No to Zillow
Buyers – you should pay attention to the condition of the house when comparing the one you’d like to make an offer on to the comparable sales. Sellers – go out and preview your competition (at a minimum on the internet) before you price the property. I personally don’t recommend trying the valuation model on Zillow. I’ve done that exercise on enough homes to know that it’s very hit or miss in either direction.
Hiring a knowledgeable real estate broker is key – she or he doesn’t necessarily need to be a trained negotiator (although that skill does come in handy,) but someone who can help you analyze the vagaries of the real estate market where you’re moving. The skills you need come with many years of living and working in a specific area, city or neighborhood. The skills come with reading Inman, blogs, local publications and having a great network of other professional brokers to call on. And finally, the skills come from having won and lost and knowing when a buyer and seller are too close to let them off the hook without one more try.
They Don’t Care About Your Shaky Net Worth
Sellers can find themselves going down the same flawed-logic path. “I neeeed this much out of it to buy my next house!” “I put $500,000 into the property so I need to get it out.” “I’m relocating to a more expensive market, so I have to list it high.” That crystal ball of mine seems to be on the fritz. I can’t determine exactly what your house will sell for, but I’m pretty sure it’s not going to be based on what you need.
I’m certain the buyers would love you as a person if they got to know you, and they may even want to become fast friends. What I know they won’t do is overpay for your house just to help you get into that next home.
Pricing is just about the hardest part of being a Realtor. It’s not an exact science and must incorporate sellers’ motivation, market conditions, comparable sales and location. These are the same tools we use with buyers when determining what to offer and what they should ultimately pay for a property. We do this one house at a time – not with market averages.