Can't you just picture Elvis strolling around town guitar in hand singing this line to all the sellers who have overpriced their homes?
In fact, if the real estate market were indeed personified as the late great Elvis Presley, the lyrics of Treat Me Nice would make perfect sense in today's buyer's market:
When I walk through that door
Baby be polite
You're gonna make me sore
If you don't greet me right
Don't you ever kiss me once, kiss me twice
Treat me nice.
I know that you've been told
It's not fair to tease
So if you come on cold
I'm really gonna freeze
If you don't want me to be cold as ice
Treat me nice.
Treat me nice, adjust your price. You get the idea.
I've written numerous blog posts about the importance of pricing right:
Will the Sellers Come Down on the Price?
Come on Down! You're the Next Contestant on The Price is Right
My philosophy is always to price the home properly from the onset. Overprice a home and it's ignored by the market. Subsequent price drops are only seen by a smaller segment of homebuyers and you as the seller have already lost out on many potential buyers at that stage.
Pricing a home properly at the start of the marketing period also ensures a shorter time period to get the home sold. There is empirical data to prove this. The numbers are even more drastic than I expected.
I examined all of the properties currently under contract for sale in the City of Alexandria, comparing those that have had price reductions versus those that have not, and how long each property remained on the market before securing a ratified contract between seller and purchaser. The numbers are very telling.
Alexandria Homes Under Contract
As of today, April 8th, there are 62 homes under contract pending sale in Alexandria. Of those, 24 saw price reductions before getting a contract, while 38 homes were able to get a contract while at the original listing price.
NOTE: Until the homes actually go to settlement, we do not know what the final sales price will be.
For the 24 homes that were reduced in price, the average reduction was 9.1%.
The overall average days on market for all 62 homes was 59 days.
Okay, here's the whopper. Hold on to your chairs and look at the chart above. Homes that required a price reduction in order to sell were on the market for an average of 117 days compared to a mere 22 days for those homes that were priced right from the start.
The market is singing to you. Do you want to sell your house quickly?
Take my advice. Treat me nice.
Sing it Elvis:
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Brian:
I enjoyed your post, I am a big fan of Elvis, and some of the points that you make are important. Like the time on market. Too many agents still think it OK to mislead their clients about price.
Brian,
It is all about price in so many markets flooded by inventory. That and tip top, show ready shape. It is soo important for Sellers to understand, but communication needs to stem from the agents as well. I had a friend whose house was on the market last Fall into early winter, and when she told me she had done two price reductions at $500 apiece I almost fell off my chair. What is a $500 price reduction going to do?
Now that the KING is gone price is king. Thanks for the post.
Brian - may be when it sung by Elvis the message of pricing right from the beginning is a bit sweeter:) I love your creativity and a bit of humor for a very serious issue.
Brian Good job getting my attention! I love Elvis and a music lover (grew up in the business). Sellers would be dancing like Elvis if they price it right!
Brian Price is certainly KING! There are too many people that just don't want to believe just how important it is to price a home properly coming out of the gate. Excellent work in showing them why it is!!
If I say "ditto" to what Ricardo Bueno said does that qualify as an original and contributing comment? Really, though - LOVE your posts!
Hi Brian,
I've been preaching this sermon too but the converts are too few.
Brian:
It is a sore subject with many sellers to ask for a price reduction. Many bought too high others bought right then borrowed money against their home like a sailor on leave. Good post.
Excellent Post Brian - We've turned down at least 8 listing this year alone due to price - the sellers take a cash advance on their equity and then expect to recover all that plus some. We tell them it's like going to the ATM with your VISA - once you spend that money it's gone and YOU OWE.
Alas, several of these folks we have met with have listed with others - in one case nearly 75 K over what we suggested LOL
I guess if you interview enough agents - someone will take it - but seems unethical in my opinion.
Sincerely,
Grace
What an excellent post and what an interesting study you completed. I can't believe the drastic difference of days on market for the properties that were not priced right from the start. Wow. I completely agree, homes need to be priced correctly from the start in order to sell.
LORAINE & LORETTA: I'm an Elvis fan too. I visited Graceland a few years ago while I was in Memphis for a wedding. About the only thing worth seeing in Memphis, besides Beale Street and the Civil Rights Museum. Anyways, I agree with your comments.
RICARDO: Thanks for the compliments, my friend. I know that many of my clients feel the same way.
REBECCA: A $500 price reduction is just ridiculous unless you are talking about a $1500/month rental. Price reductions have to be significant to be effective.
TERRY: Yes, price is King! Thanks for your comment.
FAINA: I may bring Elvis to my next listing appointment. Or maybe I'll just grow my sideburns longer...
NANETTE: Thanks for your comments. I like Elvis too, of course. Sellers will be dancing to the right tune when they price their homes right.
BILL: Thanks for your compliment and comments.
LEESA: Thanks for your comment. I accept dittos!
CYNTHIA: I guess we all have to keep preaching.
ALAN: It's tough for sellers to reduce the price, but without being realistic they'll never sell.
GRACE: There are plenty of agents who will take these overpriced listings with stubborn sellers. Though that doesn't help anyone.
ANONYMOUS: Thanks for your comments. You do have a good point regarding homes that are priced to sell very quickly (i.e. fire sale) and I'm sure that some of those are thrown into the mix and bring down the days on market stats significantly. 22 days average is very quick. A reasonable market exposure is between 45-60 days. 65-80 is about average right now, but that includes all the overpriced listings.
PATRICIA: Thanks for stopping by and commenting on the post.