What’s the wisdom behind wise pricing? Your home will sell faster and for more money.

I am proud to say that I have had a salutary influence on real estate agents who live and work nowhere near me. Locally, no one has learned anything, but that’s their problem – and their clients’.

This is me DM-ing in Facebook with an a team leader in Florida whom I’ve known for – could it be? – 17 years or so:

We’re talking about pricing, of course. Nothing in residential real estate matters more. And specifically, we’re talking about my ideas about wise, stupid and sleazy prices.

I’m telling my friend to look at thousands of prices, but we’re not going to do that. But there were nine Closed listings in my Hotsheet this Sunday morning – why? it’s a mystery – so we’ll use those to demonstrate my logic:

But wait! Only four of the nine Closed prices are wise. Perhaps. Let’s post-mortem them one-by-one and count again at the end.

Not adorable – collapse for cash at ~60 DOM – but wise.

Another big drop for cash at high DOM, but wise.

This is why appraisers hate Closed sales with low DOM: They conclude that the property was thrown away. I expect the original offer was $240k – 80% – with $255k – 85% – being the counter-offer. Listed at a wise number – which, as I’ve noted on Facebook, is often a tell for throwaway homes. Is 9 DOM, 85% SP/OLP a full, free and fair test of the market? Regardless, unwise.

This is a double-dip – same agent ‘represented’ both seller and buyer – and that looks like a $300k offer with a $5k face-saving counter. I call it a wise offer.

Concession-bait. Born to be unwise. You can see that the intent is to simulate a $300k offer, though.

Wise. It actually sold in 7 DOM. No idea why it took ~40 days to close cash.

Virtually the same story – with both serving as nice illustration of the dilatory power of sleazy pricing. But: Wise.

Cash taking a concession is probably repairs. My bet: Offered $320k, countered at the then-reduced list price, then the investor split the difference post hoc with a repair concession. I like this as a wise offer.

Offered $400k, countered at $405k? I like this as a wise offer.

You have to look at a lot more listings to know for sure where Closed prices cluster in your market. Is it on $20k, $10k or $5k boundaries? But I know for sure where it isn’t – at $xxx,999, $xxx,995, $xxx,990, $xxx,900, $xxx,500, etc.

But: We went from mostly unwise to mostly wise offers, and we dissected the logic behind the unwise numbers.

This is the most painfully obvious truth in real estate, and the one that is seemingly hardest for agents to learn: If you price your listing using a number that seems both fair and honest to buyers, you will sell faster and for more money.

Who knew…?