The wrong pricing and marketing strategy can severely damage your home sale. Here is a case history! A Fifth Avenue 2 bedroom -2.5 bath condo was listed for a very aspirational price of $5,250,000 in June of 2018 in a declining market by a broker who agreed to the price to get the listing. This is called “buying a listing” in the real estate industry. The apartment was reduced by 6% to $4,950,000 three months later. The market will tell you in 30 days if the price isn’t right. The price reduction should have been made after a month on the market. Then two weeks later it received a 7% price reduction to $4.6M. Then the owner let the listing expire. I consulted with the owner telling him the correct market price.
The owner took my advice however added a premium to my recommended price and resisted with the same broker. There is a misconception that when a listing expires and is resisted that it resets as though it is a new listing on the market. However, the truth is that if a seller takes his or her apartment off the market and hopes to push the reset button by relisting it with the same broker the days on market continue. In this case, now 207 days showing the last price change of $605K 26 days ago. Lessons to be learned are the following:
1. Don’t list at an aspirational price in a declining market.
2. If you do overprice to test the market and your showing activity is poor in the first 30 days then drop the price to market price.
3. Don’t give dripping price drops; it damages your listing. You end up getting less than if you priced it correctly at the start. 4. Don’t think that you can take your home off the market, resist it with the same broker and reset the days on the market clock. It keeps ticking!