Aug. 11, 2006: Phoenix home sellers should select a price to make their house stand out in the marketplace
As we've talked about before, when you put your house up for sale, you should price it to the market. The idea that you can fool a buyer into paying more than a home is worth is false. Buyers will come to your home knowing what it is truly worth.
Moreover, it is usually not a sound strategy to price the home for more than it is worth, hoping to negotiate to a higher-than-market price, or, at the least, to reduce the price slowly to the market value. In both cases, you will needlessly squander your early window on the market, when the most buyers are interested in your home.
But in our current buyers market, home pricing requires even more finesse. No matter what you might think your home is worth, what it is actually worth is what a buyer is willing to pay for it. To get a home sold in the current surplus of inventory, you might have to start your marketing effort at a below-market price.
We're not talking about fire-sale discounting, but rather using price to establish market differentiation.
Working with competitive listings, you should try to identify a price at which your home will stand out from the herd. This requires fortitude. You have to be willing to acknowledge where your home stacks up against its competition.
If your home has appropriate upgrades, it might be worth a little more. If it has pet odors, it's worth a lot less. If you have six nearly identical competitors in your subdivision, you may have to choose a price lower than you wanted, even if your home is objectively the pick of the litter.
In that circumstance, pricing above the true dogs but below the homes that are almost as good can make your house sell while the others languish. Buyers will see your home as the best overall value.
We're not trying to score points on the neighbors. The goal is to get your money into your pocket on your timetable. A savvy pricing strategy can swing the balance.
Greg Swann is the designated broker for BloodhoundRealty.com, a full-service Metropolitan Phoenix real estate brokerage. This article originally appeared in the West Valley regional sections of the Arizona Republic.
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