Pricing Your House to Sell in a Down Market

Unfortunately for me, I relocated to Central Ohio approximately two years ago during the worst of the down real estate market. I still see seller's in Ohio making the same mistake we did. I just completed four months of Real Estate Sales classes to apply for my Ohio Real Estate license. I wish I had known then what I know now and could have saved myself possibly thousands of dollars and endless amounts of stress.

First we had to put our farm house located in Central Illinois on the market. Then we had to find a house in Central Ohio. I met first with a very well known agent in the Central Illinois area. My thinking was that in order for my house to sell quickly I needed that agent that you saw plastered all over billboards. He must be good right? After all those billboard ads had to be expensive so the guy must sell a lot of real estate.

The first thing I stressed to big famous agent was that we had to move this property quickly. My husband had already started working in Ohio and I did not want my family living separately. So famous agent pops out some fancy computer printouts of what he feels we should price our property at. I am stunned. This price is way over what I suspected we could get. But heck I am not a famous agent with my face plastered on billboards so what do I know? I ask him several times if he is sure that the property can sell for that high of a price. He assures me it can and will. Well who I am to argue? I'm ecstatic thinking of all the extra money I will have to put down on my new property in Ohio. I was so naive!

He also gives me some advice to spruce the house up. Mistake number two is I took his advice on paint colors. I was advised to repaint the kitchen white to make it "clean and appealing". I did question this advice asking if that would make the kitchen appear cold, but he assured me it would not. Hired a painter and repainted the entire kitchen and dining area white. As soon as the painter was done I knew it was a mistake. But my thinking at the time was it's just paint and surely someone can see that they can just re paint it to warm it back up. Huge mistake.

Our first week on the market is a huge flurry of activity. We have so many showings scheduled I feel confident that agent was right and the house is going to sell quickly. Week two comes and we still have quite a few showings so I'm not worried. One agent calls to give me feedback. She says the property is overpriced and we should repaint the kitchen and dining room as they appear very cold and hospital like. Hmmm. I reply to agent that paint is easy to change and surely that will not keep the property from selling. She replies "well you can go ahead and take that chance but for the high price most people will want a house that needs absolutely zero work". I hang up the phone wondering if I picked the wrong agent.

Fast forward to 2 months later. We now rarely get any showings on the property and the feedback is consistently the same. Kitchen is too cold and the price is too high. I call my famous agent. It takes a week to get a call back. I ask if we should lower the price. He says he thinks we should. I remind him that he was the one that set the price for the property which he ignores. We lower the price.

Fast forward another 2 months later. My property has now been on the market almost 6 months. No offers and very few showings. My entire family is stressed living apart and we decide to lower the price again and go ahead and move to Ohio. I can never get famous agent on the phone and mostly have to talk to his secretary now. Our house has now gone down in listing price $31,000.00!! It is now listed so low I wonder if we will even get anything to put down on another home. Famous agent blames the slow Real Estate Market.

We now become buyers and look for property in Central Ohio. The prices shock me and almost give me and dear hubby a heart attack. Surely they can't be serious listing a house with no working plumbing or electricity for $250,000.00? Maybe they listened to a famous agent too? Finally we found a property we can live in and be happy. Only problem is it is priced way over what we feel it is worth. The property has been on the market for one year. We look at a property next door that has also been on the market for one year with a huge price tag that we feel is even more over priced then the first property. So we go back to the first property and decide to make an offer of what we feel the house is worth. Our offer comes in at $20,000.00 less then they have it listed at. To our surprise they counter offer. We settle on a price that is $18,000.00 less then the house was listed at.

Now we just have to get our Illinois property sold! We reduce the price one more time and finally start to get offers. Now I have no doubt that if we had priced our property correctly at the beginning we would have had it sold months ago. After weeks of negotiating the Illinois house is finally sold way below the original listing price.

Knowing what I now know from researching and taking real estate classes, the one thing in common all these properties had is that they were all way over priced for any market, but especially a slow market. If I had priced my house for the right amount from the very beginning of the listing, I could have saved myself thousands of dollars in up keep expenses and untold amounts of stress and sleepless nights.

A property for sale will get the most showings and views during those first critical 3 weeks of being listed. So if your property is over priced, you have just ruined your best time to find the right buyer. Because my house was overpriced, the people looking at it had totally different expectations than people who would have looked at it in the lower price range that it should have been at from the beginning. I know a lot of people go with thinking that if their property does not sell they will just lower the price. But really think about the impact that has. We went through 3 price reductions in 6 months. That told buyers number one the house was way overpriced and number two these people are desperate! Never a good position for a seller to be in. This in effect gave away any bargaining power we might have had as the seller's of the property.

After buying our Ohio property the house next door started going into foreclosure. Rather then lower their price they were actually going to lose their entire investment by being foreclosed upon. Lucky for them, a buyer came along at the last minute and made a very low offer which pulled the house out of foreclosure. The house ultimately sold for $50,000.00 less then its original listing price. When we bought our property next door the first thing they asked us was why we did not buy their property. I had to be honest and tell them we didn't even consider it because we felt it was too overpriced. This did not make for a good new neighbor situation. But lucky for me the people that ended up with their property are wonderful neighbors.

Whenever you list a property whether its an up real estate market or especially a down real estate market, be sure you price the house correctly from the very first day of the listing. Good agents know that an overpriced property is the kiss of death. Anytime a real estate agent encourages you to list a house for more then even YOU think it's worth, run to the next agent to interview. Or if you have an agent telling you that your price is too high, listen!! Look at the comparables in your area and make yourself educated on what real estate in your area is selling for. At the end of the day you will have saved yourself a lot of money and time and be ready to move on to your next property in a matter of weeks verses months or even a year. And my last bit of advice is to never paint your kitchen walls white!