The Art of Pricing

[flickr size="small" float="left"][/flickr] When placing a property on the market for sale, it is so crucial to come out of the gate with the right price from day one. As a listing lingers on the market for over 30 days, and price reductions must occur, this makes the listing appear stale and as if nobody wants it. But how do you come to the right price? Since every property is essentially different, there is somewhat of an art form to accurately evaluating property values. Depending on the type of property (ie income property, condo, single family home, etc) most will use the standard dollar per sq. ft averages of the recent sales in the immediate area. This is effective to give a starting point; however, one must delve deeper. You have to look at the size of the lot, quality of finishes, perceived value from a buyer's perspective, along with the condition of the market & desirability of the location.

Once, as an agent, I feel I have the right value, then the information has to be clearly expressed to the owner/seller to show them how you came to a particular number. This can be a tricky proposition, as obviously seller's want to maximize their profits, but they also often have a skewed view of the value of their own property. Emotions definitely factor in, and can often overshadow empirical evidence. I do understand the thinking that it is easy to come down, but you can't really go back up; however, again, the longer a property lingers on the market with little to no activity the worse it is perceived by other agents and their clients.

This is why one really needs to come out from the gates with the right amount from day 1. It is imperative!