Brandon Nelson
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Just Rip It!
I love analogies and metaphors. I read a quote once that praised them for “containing the most truth in the least space.” And I heard a great one today, referring to the pace at which a seller adjusts the list price when a home is not selling.
Far, far too often sellers nudge the price down tiny increment by tiny increment. The reason is usually that the seller believes their home is priced right to begin with, , and that a nudge of sometimes-as-little-as-$1000 will bring the buyers out of the forest and the house will finally sell.
This almost never works.
More often than not, the tiny drop is akin to “pulling the band-aid off s-lo-w-l-y” and feeling every second of agony as you go. This is ESPECIALLY true in a declining market, like we’ve had here in Bellingham recently. The incremental price drops end up chasing the market down, down, down, always just behind what the real market value will ultimatley be.
Assuming the seller and listing agent have collected and carefully analyzed all the pricing feedback from from past showings, and determined the number that would actually get the house sold, then moved it there in ONE adjustment – also known as “Ripping the band-aid off QUICKLY!” — the agony is minimized, the house sells, and the seller moves on with what proves time and again to be the best net possible.
Get the market to talk, then listen to the market and align with it as efficiently as possible. Just RIP IT!!!
When we sold our last house, we had several interested parties who submitted offers right away. A few were 3-5% below the asking price with the usual contingencies. One was 1.5% below asking and had an escalator clause that brought it up to the asking price if needed. They told our agent at the open that they had been looking for five months and that ours was the first house that they actually felt good enough about to make an offer on. In addition, the wife was under 2 months shy of having a baby.
I suppose that they just made the offer they did because they wanted to feel like they were getting a deal. While we deliberated, another buyer came in with a similar priced offer but all cash, with no contingencies at all. Of course, we ended up taking this one.
I felt a little sorry for the first couple, due to the length of their search, its results, and mostly due to the wife’s condition, but I also felt like the terms of their offer were a little trivial. If they were truly interested, why try and knock the price down without providing any comps? Particularly given their search history and pending expectations, only to tell me that they actually thought the house was worth what we were asking by setting their escalator at that point? If they had made a full price offer, they’d be in their own home for the arrival of the new baby. Given the usual inspection findings on 70 year old houses, they’d probably have been able to get the price down to what they originally offered anyway.
Rip it indeed!