By John Stemlar
Pricing Your Home in the Electronic Marketplace
A while back, I met with a new listing client to discuss pricing strategy. The client, a fascinating older gentleman, wanted us to list his home for about 20% more than we believed the home could sell for. His thinking was that the higher we price the home, the more room there would be for negotiation and the higher the ultimate selling price would be. This old school wisdom has its place in real estate pricing, but only within a pricing strategy that recognizes how agents and buyers search for homes in today’s electronic marketplace.
The real estate market is characterized by electronic matching of buyer criteria with property attributes. Anyone (which is everyone) who has searched for homes online knows that price range is a criterion used in most home searches. A home that is substantially over-priced will not come up in a price-range search among its peers. An over-priced home will, however, pull up among higher value homes with which it can’t compete (and will simply be disregarded). Fundamental to pricing strategy is positioning the home within a range that assures that no qualified buyer miss it on line. Pricing high within that range to leave room for negotiation is also a good strategy.
Think of over-pricing a home like putting underwear in the blue jeans drawer. Someone looking for undies won’t find them. Someone looking for jeans, however, will see the undies and,shrug, wondering why they are in the jeans drawer. Similarly, for qualified buyers to find your home, it needs to be in the right price drawer.
John Stemlar is a Principal and the Managing Broker at Sage Real Estate Advisors, a boutique Atlanta residential brokerage. He promotes the Lynwood Park neighborhood and the homes for sale in Lynwood Park at www.LynwoodParkHomes.com