Does Price Really Matter? It does if you want to net more!
What would an extra $300,000 mean to you and your family?
Before you say “that sounds great, but where in the world would we get an extra $300k?” Here is a quick true story on how a highly experienced, honest Realtor© can be the catalyst to a massive increase in profits on the sale of your home and why choosing the right Realtor is absolutely essential for your success.
About a year ago, a returning client came to me with the desire to sell their home and to move out of state for retirement. I jumped in and worked with my client for over 6 months to get their home 100% ready for sale. Thirty days before going on the market all pricing models pointed to a fair market price of $2,200,000, with a marketing price of $2,195,000. This was also confirmed by the experienced opinions of multiple agents whom we allowed to preview the home during our preparation. We all know that correct pricing is crucial to a successful sale of a property., It it is also a very important marketing tool for a seamless sale at the highest possible price. The week that we were ready to go live with the listing, I re-evaluated the pricing, market times and all of the current competing inventory in extreme detail. I decided, with my client's blessing, to increase the price by $300,000 and list the home at $2,495,000. This was a huge price increase, against the price modeling results and conventional wisdom. I relied on my experience, thorough understanding of the luxury home market and absolute confidence in my luxury home marketing plan to deliver on this make-or-break decision. This is where you may be thinking, “okay crazy, YOU SAID that pricing the home makes all of the difference, so why would you price is $300k over the evaluated and recommended list price?” Here are a few factors that aided me in making this experience/strategy/judgment call for my client:
We were in the second half of the primary buying season for the area and that seasonal timing can produce a significant premium for a seller.
A detailed dive into market time for homes in that price range indicated that the days on market had been shrinking significantly over the past 90 days.
Inventory in the area and competing areas nearby for this price and caliber home had also be reduced significantly in the prior 90 day period.
An evaluation of the superior quality, upgrades and offering this home had compared to others that were active and had been active over the last 30 days.
My 30+ years of experience provides me a very good guide to elasticity or in-elasticity of price in certain markets and price ranges. In this case I felt that within this set of circumstances the price would be more in-elastic, meaning a change in price would yield an insignificant change in demand.
Finally, my luxury home marketing plan is so extensive I knew we would be able to put this home in front of nearly every potential buyer within a very short period of time and create demand that would bring the highest price the market would bear.
The result was that we received a full price offer of $2,495,000 within the average market time for the area and price range. The challenge now was getting the appraiser to agree with us. The first appraisal came in short, at $2,290,000. We held our ground and forced a second appraisal, due to fact that the appraiser had the square foot calculation incorrect, did not review our provided data and we felt that the appraiser was in over his skill level on this luxury home. I made sure the second appraiser had my full comparative analysis, actual architectural drawings for the square footage confirmation and all the ammunition he needed to get to our price, we made sure he received our data from multiple sources so he could not ignore it. Success, the second appraisal came it at the full contracted price. We successfully closed escrow in 48 days and my clients were ecstatic about the life changing, $300,000 increase in their expected proceeds.
The point to this true story is that your home is usually one of the largest financial investments you will make, and you deserve to have a financial steward that will handle every detail of this transaction. A person who has the passion, experience, integrity, and discipline to protect your financial interest and put your interest above their own. Who you hire for this financial, life altering transaction really matters for your success!
Ready to take the leap and find out how much YOUR home is worth? Reach out today for a free home value estimate!
- Ron Brookshire
Ron@BrookshireAssociates.com
928.458.1403
