Pricing your apartment to sell has always been a crucial part of the process. But, now more than ever, I am seeing that marketing your home to sell at the right price could actually bring you more money. But what's even more important to know is that listing your home at an inflated pie-in-the-sky number can actually cost money and time. How? You ask... What do I mean by that?
Let me give you an example: We recently reduced the price on four of our listings and we had multiple offers on three and much more activity then before on the one that does not yet have offers. Two of these apartments had had little interest despite the lack of inventory out there and the others were flooded with inquiries, but not a single offer in 3 months' time.
Buyers have so much information through the internet these days. Sites like Elliman.com and Street Easy provide so much free info, that buyers are often much savvier than some brokers. This means they are very value driven. They'll quickly pass by an apartment that they do not feel is a good value, however negotiable the price may be. Especially with the real estate crisis still looming in the rearview mirror, no one wants to overpay. So the best strategy is to price your apartment based on its market value... In the first place!
The danger of overpricing your home is not only that you won't have the level of activity required to get the best price, but, adjusting your price later on weakens your negotiating power and position. However sound this advice may be, not every seller wants to listen. I guess we all hear things when we are ready to hear them. So sometimes we need to go on the journey with our sellers and go at their speed.
How do you know you are pricing your home right? First, you want to use an experienced broker who has a track record and who has your best interest at heart. Next you want to look at the sales activity in your building: What has sold recently, what's on the market and not selling? How does your apartment compare in condition? Is it a similar square footage, bed and bath size? Are you on a higher or lower floor? What has been renovated and what has not? Ideally you'll want to compare to a similar type apartment in your building. Then you want to go outside the building and look at similar buildings in the immediate area. These should be relatively close to each other, say a 10-15 block radius. If you can't find comps (comparables) then you can go a little further outside the immediate area, coops should be compared to coops and condos should be compared to condos. Once you get a feel for closed transactions in the past 3 months maybe as far as 6 months you should have a complete understanding of what your home will sell for.
Incidentally, the two apartments which did receive offers were both involved in bidding wars, which resulted in accepted offers over the asking price and very close to the original listing price. The moral of the story is: In a healthy market with an inventory shortage, a well price apartment in fair condition should fly off the shelf. If yours is sitting, you may want to re-think your price. Taking a good hard look at your home from a market standpoint may be a rough thing to do, but it will get you the most money in the fastest time, every time. As Jack Welch said, "Face reality as it is, not as you wish it to be". So, if you're in the market... Good luck and if you need help or feel like your apartment has been sitting around too long, feel free to email me any questions.