How-to Monday: Pricing
Associated Press photo
One of the many challenges in a housing slump: How do you figure out what's a fair price when the market keeps changing?
Pat Hiban of the Pat Hiban Real Estate Group (with Keller Williams Select Realtors in Ellicott City, and try getting all that out in one breath) says his recommendation to sellers is -- first off -- to decide "whether you are a have-to seller or a want-to seller." That's not for pricing purposes, by the way: That's to suggest to the want-to folks that maybe they really don't want to sell.
For the have-to's -- or the especially determined want-to's -- Hiban says his strategy is straight-forward.
"You want to price it less than the active competition," he said. "Forget about comparables -- we're not even using comparables anymore, because comparables are the past."
("Comparables," for those of you scratching your heads, refers to comparable sales in recent months.)
"That's how you sell," Hiban said. "The people that get it are the ones that are successful. The people that don't get it are the ones that sit on the market. You're only worth as much as your competition."
It doesn't matter what situation the sellers of your competition are in, by the way. He frequently hears from prospective sellers that they think their house is worth $50,000 more than an identical one down the street "because they're desperate, and I'm not."
"You might as well say they're realistic," Hiban said. "You're still competing."
He suggests looking at the three most competitive active listings you'll be going up against. If there are no real differences between your house and theirs, undercut them on price, he said. If you've got something they don't -- say, a finished basement -- then go with the same price.
By the way, Hiban suspects it will be harder to sell next spring because a bunch of homeowners are going off the market now with the intention of trying again during what is traditionally a big time for buying. "We're telling people it could be worth less [then] because you're going to have more competition," he said.
And what if you're a buyer trying to decide whether these are good values? Oy vey. With the dueling predictions on prices (which are all over the board, from "great time to buy!" to "watch 'em plummet to 2003 levels"), getting a consensus opinion is tough these days.
Want to offer your own opinion? Comment away.