North County Real Estate News February 2014 Issue Vol.1 | Page 4

SEllER’S CORNER

Think Twice
Before Setting Asking Price

by Jamie Smith Hopkins

I

f you want to get the best price for
your home, should you:

A. Ask for more than you think it’s
worth?
B. Ask for exactly what you think it’s
worth?
C. Ask for less and count on a bidding
war to push you over the top?

ask for $275,000, close to the neighbors’
sale price.
Result: He got two offers within a
week and a half, gave the would-be buyers
a chance to modify their bids, and ended
up with a contract for $500 more than his
asking price. He’s scheduled to close on
the deal shortly.
“The whole story, I think, is the fact
that we priced it at a point where it was
attractive,” he said. “If we were living
there and weren’t in a hurry to sell, then if
it took six months, it wouldn’t matter. But
when you’re paying the double mortgages,
the quicker, the better.”
The market statistics showing that
price drops increase the longer a home
sits on the market make sense to Pat
Hiban, who heads a real estate team at
Keller Williams in Columbia, MD. He
became so frustrated with unrealistically

housing market,” Minson said. “Basically,
what you want to do is have the same
house be underpriced or overpriced and
see what happens.”
She and a colleague did what struck
them as the next best thing: analyzing
thousands of single-family home sales in
Pennsylvania, Delaware, and New Jersey
between 2005 and 2009, catching some of
the housing bubble and bust. They looked
at the characteristics of each home to try
to determine whether it was underpriced
or overpriced.
According to their study, an asking
price of 10 percent to 20 percent more
than other properties in the neighborhood
equaled a sales-price bump of $117 to
$163 for the average home. Overpricing
by more than 20 percent produced added
gains, though modest ones, they said.
That’s for homes that took an average
amount of time to sell.
Underpricing takes an
equally modest amount of
money away from average
sellers, Minson said.
She knows this goes against
what many homeowners have
heard from real estate agents
and others in the industry. But
“psychologically, it’s not a very
counterintuitive story,” she
said. Buyers are subconsciously
taking a cue from the asking
price. “We just assume that
expensive things are nicer,” she
said.
Jonathan Hill doesn’t know
whether Minson’s findings
would hold true in all markets,
given that the bubble and bust hit some
states, such as Maryland, differently from
the three stat W26