In this market you have to price your home realistically. Remember that I’m on your side and I want to sell your home.

This market is a “Beauty Contest and a Pricing War” — no question! This is why, before listing your home, I sit down and give you the numbers. We will have to talk about the reality of the market, whatever it is at the time. I will outline a strategy to prepare the house for the Beauty Contest and I will also show you how I arrive at the price at which I would like to list your home.

I have a six part process for determining the value. What you want, in the end, is to be the “shiny penny in the handful of change.” You want the home to be beautiful, and you want it to stand out in price as well. Comparing to competition is KEY, and knowing who the competition is. That is my job and I do it every day for all my sellers.

Truthfully, it is not a fun market for sellers, but your home CAN be sold, and you can move on with your life and cut your losses! I have sold 32 homes this year so far, and it’s only November. December/January is my second busiest season of the year after July/August.

Let’s take a look at a case study recently featured on MSNBC. This story features examples of homeowners not willing, or just not ready, to price their home based on their Realtors’ recommendations. It’s often an issue of a homeowner thinking that their home is “better” than others in the neighborhood that may have sold. Here’s an example from the article.

It took John Cicero and his wife an appraisal, some convincing by their real estate agent and some hard-to-swallow facts to get them to lower the $525,000 listing price on their five-bedroom home in Valrico, Fla. They closed two weeks ago for about $380,000.
“We didn”t really understand the severity of the market,” Cicero said. “We lost close to $100,000 in equity so we were walking away from real money.”

They built the stucco home four years ago for $380,000 and poured more than $80,000 into it, putting in hardwood floors, granite countertops, ceiling fans, blinds, drapes and a built-in surround-sound stereo system. They also expanded the deck by the pool, turning it into what Cicero called an “executive entertainment area.”

“You think you have this wonderful home and people will want to buy it,” he said, “but you”re wrong.”

This is an example of what I call “coming to grips with the situation.” Sellers are in denial about the situation for a while, but then they start to understand what I may be telling them.

In this market, things are trending down. Imagine: by the time a seller gets the price down to where I recommended three months ago, it has to then go below that to be competitive.

In the article, Dan Ariely (a behavioral Economics professor at Duke University) says “Homeowners can”t stand taking a loss on their properties, yet keeping their home on the market at an inflated price could wind up costing them more. Homeowners need to look at the larger financial picture and determine how much there is to gain or lose by keeping a home on the sales block longer.

“The moment we invest in something, we fall in love with it,” Ariely sais. To a homeowner, a low, but realistic, listing price is “like someone calling your kids ugly,”

The KEY is pricing it on the recommendations of your Realtor on day one. If your Realtor can’t tell you how they came up with the listing price, find one who will! Many agents will pull a number out of the air. That is a disservice to your home and your largest financial asset!

Together we can win the Beauty Contest and the Pricing War.

Related...

• January 9, 2012 -- When Should I Lower the Price of My Home?
• March 30, 2010 -- Sellers: Avoid These Pricing Mistakes
• August 25, 2009 -- The Market: on a Road to Normalization?
• December 19, 2008 -- Not Happy With Your Hamilton County 2008 Market Value?