A tale of two house sellers in Chandler, Arizona

How important is pricing your home in today’s Real Estate Market?  Well, let me tell you a little story…

house-seller-chandlerWise Wendy Seller called me to list her pretty little house. Wendy thought her home was the best home in the area.  I agreed that her home was probably the nicest I had seen.  I searched all the comparable sales of other pretty little homes in her neighborhood which showed Wise Wendy that if she wanted to look  like all the other homes for sale, she could price her home at $300,000 and with the upgrades she had, she could probably even price her home slightly higher .  BUT, if Wise Wendy wanted to stand out and actually SELL her home, she should price her home slightly below the prices of the other homes.  Wise Wendy listened to her wise Realtor (that would be me) and priced her home at $295,000.  We sold Wise Wendy’s home for $290,000 in less than a week.  Wise Wendy was very happy and lived happily ever after.

Sadie Seller also called me to list her pretty little home.  Sadie had taken a job in another part of the country and her home house-seller-in-chandlerwas beautiful… and vacant.   Sadie decided to list with a not-so-wise Realtor who would agree to list her home for considerably more than the $300,000 the comparable sales would support.  At $350,000, Sadie Seller’s home was the most expensive home for sale in her neighborhood.  3 months later, Sadie reduced her price.  But, the prices in the neighborhood had fallen and she had lost valuable time.  6 months later, Sadie Seller still hadn’t sold her home and the value of her home had fallen to $275,000.  Sad Sadie Seller finally sold her home after 9 months on the market for $250,000. 

What had Sad Sadie lost?  Chances are pretty good that Sadie could have sold her home for somewhere around $290,000 if she had priced it correctly at the get go, which is a $40,000 gain, right?.  But what many sellers don’t figure in are the carrying costs of a home.  Sadie’s mortgage, insurance, HOA & utilities ran about $2500 a month.  $2500 x 9 months = $22,500.   So if she had priced her home aggressively up front, even if it took a couple months to close (saving $2500 x 7 months) she would have been ahead by $57,500 and then Sadie wouldn’t have been so sad.

The end.

****The names have been changed to protect the not-so-wise.