Q: "I am thinking of putting my house on the market and would like to really stick to the price I paid in 2004. I know the market has adjusted but how can I get the price I want with the market so weak? I’m thinking an agent bonus and maybe a giveaway?"
A: Your question is very common in today’s environment. The slow down in the real estate market has left many sellers scrambling for creative ways to sell. It’s a popular time for gimmicks ranging from broker bonuses to mortgage buy downs. However, keeping within the model of old fashioned solid real estate principals, only one thing matters. That is the price.
It's quite simple if you have two competing properties that are in similar condition and location. The one that typically sells quicker is the more competitively priced home. Gimmicks only work when you have competing properties that are priced nearly the same.
A gimmick may help a buyer choose one property over another. Of course, its all about the dollar. If a buyer can buy a condominium or a house for thousands less than a competing property, the fact that their buyer agent will get a bonus doesn't matter. The same goes for giving a car away, a buyer payback and so forth.
A buyer in today's market is going to look for a purchase that represents an opportunity. They want a low mortgage balance as rates slowly increase but are still historically low. If you are a seller who has implemented bonuses to either the buyer agent, listing agent or buyer themselves, or if you are giving away a car or a vacation...you may want to try a different strategy...something that really matters to buyers in this sensitive market, adjust your price to a realistic value where it belongs and remove the gimmicks. Next week we’ll answer a blog visitor question regarding staging your home and how that may help it sell in the current market.
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