Selling Land

Are you sure you want to sell? Pricing your property below the “Clutter”

Several years ago, I saw a comic strip that showed a property owner in different conversations about his property. The scenes were all the same except that the person the owner was talking to was different in each scene. As the property buyer in the first scene, he was pointing out all the property flaws to the seller. Talking with the bank appraiser, he was pointing how much better his property was than his neighbors’ properties. When the tax assessor stopped by, the property suddenly became a waste dump, and finally when a prospective buyer was talking with him, the house was the most unique property in the world.

That’s an accurate view of the way we think about our stuff!

When trying to price your property for sale, you have to guard against your ownership bias. The amount that you paid for the property has no bearing on the current market value. The fact that the property has been in your family since Noah walked the earth is meaningless in the market. The attribute that meant the most to you may or may not have any value to prospective buyers.

The open market is a cold and cruel thing. The market’s view of your property can be summed up by Sergeant Joe Friday’s famous phrase “Just the facts, ma’am.” Value is related to the cold, hard facts of the property: location, utility, physical attributes, income and expenses, etc.

If you have decided that you are serious about selling your property, taking a step back and looking at it from a prospective buyer’s point of view is very important. Removing your personal, emotional attachment and optimistic financial goals from the pricing decision are critical. Most often, it is wise to have the assistance of a professional. Selecting a real estate agent, broker, or appraiser who is knowledgeable and actively involved in the market for your type of property is very important. They can give you an unbiased opinion.

One of the first factors for making sure that your property gets noticed is pricing. It has been my experience that when you price your property below the clutter, you will attract attention. By “clutter,” I mean that realm of pricing that is reflective of conditions six months or more ago. In most markets today, an abundance of properties are available and often they have been on the market for a long time and become stale. All of those old listings that are priced based on the old market conditions create a cloud. It is easy for a property to get lost in the crowd when there are so many available. That is particularly true in a declining market. Pricing that seemed reasonable originally could be considered aggressive today.

If your property is in a market segment that is expected to have an increase in the availability of properties over the next six months due to foreclosures or other factors, pricing at the lower end or below currently available comparable properties will potentially increase the attention your property receives. However, reaching the balance between an aggressive asking price and avoiding the impression that the pricing is a “fire sale” number can be tricky. That is why it is essential to have the assistance of a qualified professional that can help you navigate as you fly below the “clouds.”

This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of LANDTHINK. Use of this content without permission is a violation of federal copyright law. The articles, posts, comments, opinions and information provided by LANDTHINK are for informational and research purposes only and DOES NOT substitute or coincide with the advice of an attorney, accountant, real estate broker or any other licensed real estate professional. LANDTHINK strongly advises visitors and readers to seek their own professional guidance and advice related to buying, investing in or selling real estate.

About the author

Richard Dempsey

Richard Dempsey is a Realtor® and Sales Associate at Coldwell Banker Commercial Saunders Real Estate, who specializes in large acreage tracts, citrus groves, and development properties. His sales, appraisal, and lender backgrounds make him a knowledgeable resource about the diverse aspects of Florida’s current real estate market. He has received numerous industry awards for outstanding sales in real estate, the most recent being recognized as #21 worldwide among all associates in the Coldwell Banker Commercial (CBC) affiliate network in 2008. Dempsey is President Elect for the Lakeland Association of Realtors® and serves on committees at the Coldwell Banker Commercial corporate level.

3 Comments

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  • Great article Richard. Many of my more recent sellers seem to have a more reasonable goal in mind. It is getting a little easier to list properties at a marketable price as the mindset of the seller is changing. There are still those that are priced high retail, but as you said, those properties are stagnant. We have been able to make several sellers very happy of late, by selling a property very soon after putting it on the market…at or very near listing prices. As you detailed above, we had those properties priced below the crowd….the crowd that is getting no traffic whatsoever. The crowd that is too high to start with. Sold Properties at reasonable prices = Happy Sellers, Happy Buyers, and Happy Agents!

  • Your article is informative and others have stated the same in different ways. Some sellers just have to ask plenty in hopes of catching someone that will pay a big price. If you pass every overpriced listing up one might not have much inventory.

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