Monday, August 14, 2006

Thoughts on how to sell in this changing market.

lWe’ve all seen it. The market has shifted and houses are sitting on the market for a lot longer. Those houses that are selling are aggressively priced and sellers are motivated not to follow the market down.

I was thinking about how this affects a strategy that has been very effective in more stable markets. The strategy is to maximize the amount of exposure a property has instead of consistently reducing the price in order to get a sale and maintain commission. In a normal market this translated into pricing the property above market value and offering a commission premium on the property. We all know that regardless of perception, higher commission offerings get more showings which translates into more exposure to potential buyers.

Now what does this mean for the new declining market? My initial thought would be to change tactics and price the property to at, or just below, the median market value and boost the commission to above the standard six percent. Higher commission properties are still going to get more exposure than properties with discounted commissions. Your client will still get their target price and should not have to discount the property multiple times to get it to move…. Please give me your thoughts and feedback on this tactic.

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