Price It Right and They Will Come

As Appeared Sunday August 17, 2008
Michael Saunders & Company

There’s an old sales and marketing adage that goes something like this: If you can demonstrate real value in a product or service, people will have no objections to its price.

Old adage? Maybe. But it’s one that is certainly apropos of the times when referencing what properties are—and are not—selling in a real estate market that challenges determined
sellers to be competitive to the utmost degree.

When Florida’s latest real estate boom was running full tilt, speculators—as opposed to genuine end-users—were ratcheting- up prices to such an extreme that it suddenly became all
too apparent that real buyers were no longer willing to stand in line and pony-up for properties that far exceeded their true market value. Sales suddenly plummeted spectacularly and, in
a panic, many of these over-leveraged and under-capitalized speculators fled the market—but not before dumping thousands of overpriced properties into it in a last-ditch attempt to turn
a profit, or at least recoup their original investment. The boom went belly-up when it no longer made any sense to pay exorbitant prices in a market flooded with scores of competitive
properties. The pendulum has swung widely in favor of buyers, who are now in firm control of the market.

Naturally, this takes some getting used to for newer sellers who fully expect to enjoy profits on the same scale that many of their friends or neighbors enjoyed only a few short years ago.
For many of these sellers, they know the market is hobbled, but their perception of the worth of their home in yesteryear’s hyper-inflated market hasn’t caught up with the reality of
what its corrected value is today. But it’s a reality that must be reckoned with if you truly want to sell your home.

For this reason it has never been more imperative to work in close accord with your listing associate, who is your vital link to understanding exactly how your home must be priced
in order to sell in a reasonable timeframe. Mindful that real estate associates function not unlike other professionals you retain to provide expert counsel (doctors and lawyers come
immediately to mind), what he or she tells you may not always be what you want to hear. Still, just like any other experienced practitioner worth their salt, they are acting in your best interest
when they deliver news that may be painful or disappointing. They don’t use a crystal ball or some other sort of mystical insight to come up with a price for your home. They perform
exhaustive studies of recently sold properties, in and around your own, to find out exactly how much buyers are willing to pay for a home like yours. Unfortunately, yours could be the
perfect home; but we are dealing with an imperfect market, the prescription for which is pricing aggressively in order to meet the market head-on.

Many sellers mistakenly believe that international buyers, with their dollar-busting currencies, are the perfect panacea for our troubled market; that they aren’t savvy enough to know—or
aren’t all that concerned—if a listing is overpriced. After all, their rationale goes, they’re getting a great deal regardless of the price in dollars. Not true. In fact, international buyers seek
expert counsel too, and are just as demanding as domestic buyers—if not more so—when it comes to squeezing every ounce of value out of a real estate transaction, especially now
that the dollar is gaining ground again.

As month after month of steady increases in unit sales of existing homes demonstrate, homes that are the most aggressively priced are selling within a reasonable timeframe. Overpriced homes, on the other hand, are apt to languish indefinitely on the market—often taking on the unwanted stigma of a problem property. Price it right and they will come. Price it wrong and your home will be as lonely as the Maytag repairman.