Successful pricing strategies in any endeavor must take the competition into account—so when it comes to right-pricing your property, that factor is at least as important as any other.
From the seller’s point of view, right-pricing starts with a walk-away number: a price that would be so low it would result in financial hardship. While offers at or below that level may throw the seller into an emotional response- or temptation to not respond at all — I always advise the conversation be kept alive and to offer a response. On the other end, at the top of the pricing range are the outlandish pie-in-the-sky prices that never really materialize. Those billionaires who “just have to have a property like mine and don’t care about the bottom line” also are non-existent in the current market environment. As has been pointed out elsewhere, they didn’t become billionaires by not caring about the bottom line.
From the buyer’s point of view, right-pricing is what they’re looking for (or at least hoping is out there, somewhere). Many of today’s serious house hunters here in Greenwich begin their search by combing the Greenwich listings, specifying a price range. It may top out at just a bit more than they actually are willing to pay — but the lower number is often well below what they can afford. Needless to say, if a listing fits all their other criteria but the asking price is below comparable offerings, it’s a lead pipe cinch they will be calling their Realtor® to arrange for a showing. It’s a phone call they’ll make sooner rather than later — especially if they’ve had earlier experiences that led to a bidding war.
You can be reasonably assured that your house is priced wrong if it’s been on the market for months with no reasonable offers forthcoming. Other market factors can be at play, but the asking price is the first place to question.
So how do you know if your property is priced right? If you are confident that your property is in top shape, and if your agent’s comparable report shows that recent similar sales have closed safely above the walkaway level, setting a price that’s below top dollar should result in a strong buyer reaction — and a timely offer (or offers) from qualified buyers on terms that put a smile on your face.