Are you pricing your home through your rear view mirror?

I just wrote a contract for a buyer, on a home that had been on the market less than two weeks.  I called him right after the property went on the market, telling him that this 3 bedroom home on the golf course that was just available.  Although he’d been looking for a place like this for almost a year, he told me the timing wasn’t right. 

I had already shown the property to another client and knew the open and expansive two sided golf-course frontage would sell the home.  While the home was 35 years old and in mostly original condition, it appeared to be decently maintained.  I did feel the property should be listed for about 4% less than it was and shared this feedback with the listing agent when she contacted me.  At the end of the first week on the market, the seller reduced the listing price on the home by 6.5%, making it a great price, even considering the updating that would be needed. 

I got a call back from the buyer’s wife several days ago, saying that maybe they should at least look at the house, and by the way, “what was the price?”.  When I shared the updated listing price, they decided that they should take a look at the home immediately.  We did.  The next day, we visited again, this time with several friends of theirs who lived in the neighborhood.  Everyone was ooh’ing and ah’ing the views, acknowledging that some updating would make this home a gem.  Their friends went so far as to suggest that the home might be worth more than it was listed at.

We wrote the contract, which was accepted by the seller. 

This is the second contract I’ve written for clients in the past two weeks where the home was new to the market, and priced very competitively.   With all the press these days, sellers are  taken aback that their properties have sold so quickly.  What it tells me, is that we are finding an equilibrium in housing prices, at least in some areas, and that with all the pent-up buyer demand, we are on our way to a recovery, which to me is a much more balanced market.

Lesson learned:  Don’t price your house looking through your rear view mirror!  Price to today’s market, knowing that your home will get the most traffic during the first couple weeks that it’s on the market.  Capture your buyer early, and get your best price.