The importance of pricing a home correctly

I drove past a house we sold in 2011 in  Croft Street Heatley which had recently re-sold and I thought I would check to see what it sold for.

I recalled it seeing it on the net for $339,000 negotiable. After getting getting back in the office this morning and seeing the result it confirmed what I see time and time again – houses selling well under initial asking price.

One theory I have is that owners take little notice of what houses sell for around them. They tend to look at the listed price when you first approach them and often do not have access to what the properties eventually sell for in relation to the advertised price.

Selling is such a stressful exercise to many owners are in the “here and now” when you talk to them – relying on what they see a home marketed at around the corner that’s in  paper at what’s around or click through a few homes that are similar on realestate.com.au.

But the reality is not what a home first goes on the market at – but what it sells  for.  And owners can be fooled by what is for sale not what has sold.

I liken it to walking in Myer and get a makeover – before too long your walking out with a black and white bag full of Chanel feeling great. The fact is you live with the realty once you get home and realise what you spent in the heat of the moment. That’s the here and now! And good salespeople can harness that emotion.

Emotional mastery is difficult and the real estate market is like any other sales environment – your trusting the agent to provide with up to date information – but do you listen – or are ideas as to price  already made up.

The consequence is that over pricing a home can cost you money at the end of the journey.

Here’s a great example – the property I mentioned in Croft Street.

The home was purchased by the prior owner in January 2007 (just shy from the top of the Townsville Real Estate market (April 2007) for $262000.

The new owners did a refresh internally (painting and tidying up the yard). No structural changes where made just a “botox” as I call it – superficial make over.

In may 2011 the owners, who are long term family friends asked to sell the property. Highly organised when it comes to selling, the property was represented beautiful for sale.

We marketed it at $359000 negotiable and it sold for $340000 on the 24 May 2011.

The property was taken to the market again in 13 February 2013 with a franchise agency.

It finally sold 6 months later for $305000 on the 29 July 2013.

That’s a loss ( without allowing for commission legal fees marketing costs  and stamp duty on the original purchase and sale) of   approx. 10 % in 2 years.

Shelly and I take the sale of owners property very seriously – and we have to keep challenging ourselves with how to keep the property fresh in the buyers eye’s – it has remain attractive.

And that’s the challenge real estate – the consequences can be costly – ask the former owners of 3 Croft Street would no doubt had a hard decision to make in accepting such a financial blow in 2 years of ownership.

And the key statistic here – Sale price to marketing price — the home sold for 85% of it’s first listed price.

This is great example of owners needing to do there research themselves and give themselves credit for what they know or can find out themselves through some simple research. There are tools including apps available for free that give buyers wealth of information. A simple start can be information available  realestate.com.au below a property are sales for the area.

Pricing a home can be difficult – but the closer you get them being right from the start the better result for the owner in the long term.

Graham