Price Low to Sell High
The founder of one of New York City's largest real estate companies has some advice for anxious sellers in today's housing market: Slash the price of your home before you put it on the market.
National real estate expert and television commentator Barbara Corcoran recommends that sellers price their homes 15 percent below comparable homes on the market.
"There's nothing sexier than an underpriced house," she said. "The most enticing houses on the market are the cheapest and newest listings."
If your home is languishing on the market, try Corcoran's tips for getting your home sold.
Tip #1: Stay ahead of the curve.
Corcoran knows that her advice isn't popular with sellers. "It's like the doctor giving you bad news that you have to hear," she said.
But drastic measures are the only way sellers can stay ahead as the pricing curve for houses speeds downward, she says.
In a bad market (and Corcoran says this is the worst real estate market she's seen in the 30 years she's been in the business), sellers who overprice or even market-price their homes often end up making small price reductions again and again as similar homes that are priced lower come on the market.
"Nothing smacks of desperation more than incremental price drops," she said.
Chiseling away at the price signals to buyers and Realtors that a house is "stale" or that something is wrong with it.
Tip #2: Don't wait for conditions to improve.
Corcoran advises sellers against "sitting it out" in hopes that the housing market will improve. "You're joining thousands of other homeowners who have also decided to wait," she said.
She predicts the market will continue its slide downward, and those who wait will have to make even more drastic cuts to sell their houses.
Realtors from various parts of the country agree with Corcoran's advice that sellers should underprice their houses before putting them on the market. However, several said a 15 percent cut seemed harsh.
Susie Hatch, a Realtor in West Hartford, Conn., said pricing a house 5 percent below comparable houses is more realistic in the Hartford area market, which hasn’t been as troubled as the housing markets in Las Vegas and California.
Tip #3: Find a great broker.
Corcoran and other experts say it's important in a down market for a seller to hire a top Realtor because the top 10 percent of Realtors make 90 percent of the sales.
To find a good Realtor, Corcoran suggests visiting a local real estate office and asking the owner or manager to recommend the best agent for the job. "They will put you in the hands of someone who will get it sold," she said.
Tip #4: Whip your home into shape.
Finally, Corcoran says setting a lower price doesn't mean a seller can skimp on getting their home in tiptop shape before putting it on the market. Clear out clutter and family pictures; they create "visual noise" that distract a buyer from imagining your house as their house.