As a 25 year veteran of the NYC real estate market and a student of the sales industry since my time working retail at 16 years old, the single most consistently and frequently stated mantra has been and continues to be, “the customer is always right.” Au contraire mon frere! I’m here to tell you first hand that this couldn’t be further from the truth when it comes to a seller pricing their own home. And I include myself in the sweeping generalization.
There is perhaps no more important element in the process of selling your home than accurate pricing. By accurate, I mean selecting the price that gives you, the seller, the best chance of procuring the highest bid within the time frame that suits your schedule. Pricing is hardly an exact science but rather a combo of interpreting data and a “feel” for current market conditions best understood by those in the trenches: real estate professionals. If you are preparing to sell your home, here are some ways that may help you in selecting a fair market price:
1. Don’t believe the hype – We all hear what we want to hear and in the case of most sellers, they hear only the positive spin on market conditions. Keep in mind that most of the people you know aren’t as likely to share with you that it took them 6 months to sell but they are much more likely to tell you about how they and everyone they know had bidding wars on their property. Also BEWARE of real estate agents who tell you what you want to hear. There are many out there who desperately need an exclusive listing even if it is just to procure buyers for other properties. They often get so excited to obtain the exclusive that their judgment becomes cloudy. Or they just lie.
2. Compare Apples to Apples – I can’t tell you how many sellers have said to me “but my neighbor sold his/her apartment for $X” when the neighbor’s apartment is dramatically different in one or more ways (ex. better views, renovated, completely different layout, higher floor, better or worse building). I also often hear, “a 3BR across the street just sold for $X.” It’s imperative than when analyzing comparable apartments, you stick with those most similar to yours and make proper adjustments for various amenities and differences if necessary. Compare prewar to prewar, doorman buildings to doorman buildings, and location should be in as close proximity to your home as possible. It may be a good idea to spend a couple of weeks with a friend attending open houses for similar properties but remember that the asking price of active property has little to do with actually sales prices.
3. Objectivity is difficult but necessary – I know it’s difficult for a seller to remove her/himself from the attachment they have to their home. But you must do your best here. Don’t inflate your price based on your emotional attachment to the built-in ironing board or the bidet that you think is so nifty. I once had a seller who installed a urinal in his bathroom and really believed it would increase the value of his property. If you are going to hire a real estate agent, make sure you are comfortable with their honesty and don’t fall for the person who “yeses” you to death and waxes eloquently about that mirrored ceiling and disco ball in the bedroom. It may be beneficial to sit down with a friend (a really good friend) and make a list of all the things that you think are selling points and have them tell you which are a stretch.
4. Finally…Don’t price too high or too low – Once you have selected the correct sold properties to compare to yours, made your list of selling points and had that friend edit them, and perhaps met with a few real estate agents to get their professional opinions, select an asking price that “feels” right. A tall order indeed because you must remove your emotions from the pricing process. If you have determined that other homes like yours are selling in the $1800 to $1900 per square foot range, then you need to objectively determine where your property falls within that spectrum. Most of us would need help from that friend or real estate pro for this.
Having sold multiple properties over the years, I know all too well how difficult it is to practice these 4 tips. I do know that even for me, when selling my own homes it has been essential for me to involve an objective party to help me get out of my own way and make decisions based on accurate and real time market data to yield the best price.