Seven 'deadly sins' of pricing property

Pricing property correctly is one of the keys to real estate success, according to Melanie McLane, owner of The Melanie Group, a real estate consulting company in Pennsylvania.

“Once you get a real estate license, you can start telling consumers what their homes are worth,” McLane said. “And I find many people aren’t prepared or haven’t done their homework to know what the market will support before giving price estimates.”

Melanie McLane

McLane, a certified appraiser and a REALTOR® for more than 30 years, teaches a property pricing course. McLane highlights what she calls the Sellers’ Seven Deadly Sins:

• Pricing higher than the competition. In a homogenous neighborhood, if a listing is priced higher than the competition, it will be the last to sell. Show the client virtual tours of other houses in the neighborhood. The goal is to have the seller look at his house from the REALTOR’S® perspective.
• Refusing reasonable offers early on. Houses are like bread – everyone wants them when they’re hot and fresh. The longer the house sits, the staler it gets. The best shot with buyers who want the house is when they make an offer. It’s not likely they’ll come back in a couple of months when their first offer is rejected.
• Not having a property in the best condition it can be. Curb appeal is extremely important to make people want to get out of the car. If houses don’t look clean and well organized, potential buyers will wonder what other things, like maintenance, the owners let slide.
• Making showings difficult. Everyone would love to have 48 hours notice but that’s not always convenient. If the potential buyer’s agent can’t track down the seller’s agent, or the listing agent can’t track down the seller, chances are that buyer will look elsewhere.
• Thinking of the house as a home versus a commodity. Sellers think they are selling their home but a buyer is looking at buying a house to make into his home. Relocation companies are good at understanding how to make a house “vanilla” where consumers can picture their own families living in the house.
• Blaming the agent. Agents don’t create the market. All REALTORS® can do is show clients what the market in their area is doing with market demand, interest rates and inventory. REALTORS® can’t fix the economy and they can’t change what people are willing to pay for a house.
• Cost does not equal value. Sellers want to believe that because the landscaping (or the pool or the kitchen) ‘cost’ them $X, it’s worth $X more. When REALTORS® have a seller who’s adamant about a price, they need to walk away. The seller needs to get that out of his system. I usually suggest they come see me in six months.