Sotheby's International Realty Donna Stockman

Importance of Pricing

Even for the most distinctive properties, location and property characteristics are the key elements in determining value. Pricing can be an emotional decision, so a thoughtfully created Comparative Market Analysis (CMA) is an essential step in the listing process. Once the market value of your home has been determined, I can help you decide on the offering price that is most in line with your goals and current market conditions. Naturally, if you wish to attract a ready, willing and able buyer in a timely manner, your offering price must be carefully positioned according to the most recent data available.

Key pricing considerations:

  • Key pricing based on a well-prepared CMA will achieve the maximum price in a reasonable time.
  • A property that is priced correctly from the beginning typically achieves the highest proceeds.
  • If the price exceeds the perceived value by even a small percentage, potential buyers may not even choose to view the property.
  • Properties that remain on the market for a long time often stop being shown.
  • The cost of improvements almost always exceeds the added value.
  • A low offer is better than no offer. Buyers can often be negotiated higher once the emotional commitment is made.
  • Sellers may set expectations, but the market sets the price.
  • If you want to sell in a timely manner, your asking price should be competitive in current market conditions.

While the goal is to achieve the highest possible closing price in a reasonable amount of time, listing a property above market value often turns away prospects and decreases the likelihood of a successful sale. An overly aggressive price prevents a property from taking advantage of a key driver in property marketing—timing. It is well known that a property attracts the most attention, excitement and interest from the real estate community and potential buyers when it is first listed. If a property is priced above market value, it does not appropriately benefit from this peak interest period. This may ultimately lead to a sale at below market value, or no sale at all. In the current market, we are seeing bidding wars on well priced properties.

The following document demonstrates the relationship between initial asking price, ultimate sales price and length of time on the market:

Strategic Pricing Considerations