Monday, January 23, 2017

Asking Price: To Drop or Not To Drop? A Critical Greenwich Real Estate Question

For more than a year, the average DOM (days on market) for residential properties have been increasing in Greenwich. It’s a “speed of sale” measure—one that most Greenwich home sellers hope will reflect that it won’t be long before they are handing the keys to happy new owners.

There are some ruling considerations that go into establishing a winning asking price. One is psychological: thinking of a buyer’s frame of mind, most people don’t want to be the only ones who are interested in a house. When a slightly lower-than-comparable asking price is part of the marketing message, it draws a crowd. Another consideration is the search bracket. Knowing how buyers tend to bracket price range parameters for similar Greenwich homes is something I can help with. If comparable homes have been selling in a range that tops out at $400,000, asking $410,000 (so you can discount it in later negotiations) is a mistake: your property won’t even appear on search results you’re aiming for.  

My philosophy is that pricing is an ongoing discussion—particularly if the buyer activity level is less than expected. In every dissertation, oration, article, comment, FAQ, and essay about successful house sales, the dictum is the same: if the place doesn’t sell, first check the asking price.

Sometimes that truism can seem indisputable. If a property’s asking price is higher than comparable Greenwich homes that have recently sold—and no outside factors have slowed all area sales- the asking price is probably the stumbling block. A homeowner can quite reasonably object that their property has unusual qualities that make direct comparisons with other Greenwich homes inexact, but that logic may not be powerful enough to counter the market figures that buyers can see (remember that they don’t want to be the only ones who are interested). Sometimes even for a home that shows spectacularly, lowering the asking price can be the simplest and quickest route to a sale.

In the case of those Greenwich homes where the asking price conformity isn’t the issue—as when there simply are no other properties that are at all similar—if lowering the asking price is not indicated, it will simply become a waiting game: waiting for the buyer who appreciates the special character of the property. The good news is that there IS a buyer out there for every property; the bad news is that unique properties attract unique buyers—as in, there are fewer of them. But there is some second good news: when they do show up, they are apt to fall in love with the place!

Pricing is part math and part skill, both art and science, and since the market is constantly changing, it’s a skill that rewards experience tempered by consistent monitoring. I monitor Greenwich real estate full time and love a roll up the sleeves analysis.  If you need that kind of in the trenches representation, don’t hesitate to reach out to me at robin.kencel@elliman.com. 

Graphic Credit: Parkland Real Estate

2 comments:

  1. Hello.....How much real estate sales training your sales team needs may vary from the needs of other companies. The type of training you need may vary also. There is however some basic needs that do well regardless of the company.Read more-
    real estate sales

    ReplyDelete
  2. I am happy to find this post Very useful for me, as it contains lot of information. I Always prefer to read The Quality and glad I found this thing in you post. Thanks find a estate agent

    ReplyDelete