A Sacramento home seller called yesterday to get my advice on pricing. She spoke to her accountant to see if it would make sense to rent out her home rather than sell it in this market. By this market, she was not necessarily referring to the falling market in Sacramento. She was talking about the economic climate that grabbed everybody by the throats last November and hasn't quite let go.
Her accountant advised her to cut her losses upfront and price her home competitively. Renting it was not a viable option. I ran the comparable sales, the pending sales and the active sales. I also looked outside of her immediate neighborhood to examine the alternative homes a buyer for a home in her price range may consider buying.
To immediately sell, she would need to be on the market at a price at least 90% of market value. Her home would need to be the best priced option available and in top condition. I suggested we also obtain a pest inspection, because once offers roll in, we don't want to be held liable to produce a pest completion on an unknown factor. A clear pest or the willingness to produce a clear pest is an important selling factor, especially among the "as is" homes that are bank-owned or short sales.
The digits in the price itself need to be alluring. Agents choose all kinds of crazy prices such as $799,999 or $788,888. Tell me, what sounds like a softer price -- $722,000 or $725,500? Numbers have a psychological affect on buyers. They can induce an offer, sound overpriced or be confusing. Buyers transpose numbers, too. So a home priced at $789,000 can become $798,000 in the buyer's mind.
Once I finished arriving an estimate of value and marking down that value, I positioned the home against the competition. If competing homes are selling at $759,000, $789,000 and $850,000, this home will need to be priced around $680,000 to get a ton of showings and hopefully multiple offers, which may drive up that price. Particularly when a home that is in poor condition with about 500 square feet less is priced at $685K and bridges the gap between $680K and $759K. Buyers today want a good deal.
I explained all the reasons why I came up with the price that I suggested. The seller digested this information and said, "OK. I ran the numbers. Your suggested price is exactly 80% of market value. I like it."
It's weird how one can do all the math, apply intuition, scrutinize, analyze and the final number always seem to match a percentage of value. It doesn't matter how the seller arrives at her final sales price. Only that she does, and that it sells.
The Short Sale Savior, by Elizabeth Weintraub, coming June 2009.
Photo: Elizabeth Weintraub, from homes in Land Park.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
