Hey, everybody, I’m coming to you with a REAL ESTATE MARKET ALERT. Yes, we are seeing more and more price adjustments in the market. It is becoming more and more clear to me that sellers in the market or your competition just aren’t getting it. They don’t understand what’s going on in the real estate market. That being said, it’s going to be really critical that you have a Strategic Marketing Plan in place moving forward when you go to sell your house. When we work with clients, we sit down with them and we come up with a strategic marketing plan that is going to get your house sold today so you don’t have to discount it tomorrow. We are also taking advantage of the market changes that we see occurring.

Having a Strategic Pricing Plan is going to be more critical now than it ever has been in the past couple years, anyway. Up to this point, the market has been absolutely crazy with pricing. However, we are seeing more and more price reductions, meaning that the market is tightening.

We actually sit down and price the properties so they will sell today so you don’t have to discount it tomorrow. So if you are looking to sell your house or put it on the market here fairly soon, I would strongly suggest that you get with your local agent, someone that you trust and has experience and knowledge in coming up with a strategic pricing plan in order to get your home sold without having to go through a bunch of discounts.

Now, I’ve had a lot of people ask me, you know, “Well, why don’t I just price it at a super high price? “What’s the matter with actually going through “a price reduction later down the road? “Why don’t we just go for it?”

Well, there’s a number of things that actually occur when that happens. The first thing is you got to put yourself in the place of the buyer. When they see a property that’s been on the market for, you know, maybe a week or two, which is the long period, right, compared to what we’re used to. But if they see it out there and they will see that price reduction, they will see that you’ve had to reduce the price. In the eyes of the buyer, that all of a sudden says, “Aha! “These people are desperate. “They’re starting to reduce the price. “They’re lowering it. “They’re starting to get a little nervous.” So now they are thinking that it puts them in a better position to be a little bit more aggressive with any type of offers. So it really puts them in an advantage and you in a disadvantage when it comes to selling your home.

The second thing that it does is in the eyes of a buyer, once again, is it puts a question in their mind of, “Hm, what’s wrong with this house?” Maybe there’s an issue with the condition of the property. Maybe the sellers are being really difficult to work with. Maybe they were just throwing a price out there and trying to get the highest price that they possibly could. And they’re going to be really challenging to work with and negotiate with. So those are some things that happen in the minds of the buyer that you really need to be careful with and you want to avoid as much as you possibly can.

Another thing that happens when you go through a number of price reductions is it just extends the time that the property is on the market. We have shown that property actually gets more money when it’s on the market in a shorter period of time than dragging it out. Again, the buyers will be able to see just how long the house has been on the market. And when it’s been on the market for an extended period of time, going through a number of different price reductions, it puts a question in their mind of just what is wrong with this property. Maybe it’s just not a good property. And a lot of times they’ll just keep on looking.

In addition to that, it puts additional pressure on the relationship that you have with your agent. Maybe you came to your agent and said, “Hey, I really feel comfortable that we can sell this property for X amount.” Well, it didn’t sell for X. Now, all of a sudden you’re saying X minus a number. And that’s a really challenging and difficult conversation that you’re going to have to have with an agent. And sometimes there’s some tension there and it just doesn’t set well. It puts a lot of tension in between the relationship and the trust that you’ve actually built with your agent themselves. A lot of animosity, a lot of frustration, and a lot of breakups that we see over pricing when it comes to a client-agent relationship. So even if you go into it as, okay, we’ll go for it. Let’s see if we can get this price. And then maybe after a couple weeks if we don’t get any bites we all agree that we’re going to reduce the price. Usually after a couple weeks when we have to go back in and say, “Okay, well “the reality is we still don’t have any offers, “so let’s go through the price reduction.” We tend to forget about that conversation that we originally had when we signed a listing agreement, and things just sometimes just don’t play out all that well in that relationship. So it avoids a lot of the tension that actually occur between clients and agents in any misconceptions that we may have.

Here’s the last point that I would like to make about pricing and why it’s really important to price it right to begin with, instead of having to discount it later. Because there is still a lot of demand for properties and for housing, even if you price it at market or even a little bit below, you’re going to create a tremendous amount of interest in the property. And the market will naturally bring the price of your property up to the market value, even if you price it below. It’s just like a sale. When things go on sale, people are excited. They come out, they look at it. Now what we’re doing is we’re receiving offers, multiple offers that are gradually just increasing the price of your property that are going to naturally bring it up to the market value, if not a little bit above. If you price it above that market, you miss out on all those buyers. Those buyers just keep on passing it by and you never get that frenzy about your property and be able to create that market that’s actually going to be driving that price up. So, my point is, make sure you have a strategic pricing strategy in place that’s successful. Make sure your agent can show you how successful they are with their pricing strategy, and lock it in. You definitely want to price it right today so you don’t have to discount it tomorrow. Hopefully that was helpful. We’ll talk to you soon.

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