Chasing the Market

I want to address the phrase "chasing the market". It's something that is SO important for sellers to understand, though I find that they seldom do.

Sometimes, clients get upset when their agent tells them what the market is indicating their home is worth today or when they suggest price reductions.

If you have a good agent (and I truly hope you do!) then they are most likely trying to protect you from losing even more money by positioning your house correctly from the start.

Otherwise, you might end up "chasing the market".

Let me explain: If your home is in the best condition at the best price, it stands to reason that it would be the first to sell. Once it sells, other similar properties may have to lower their prices to compete. Then, out of that group the one in the best condition at the best price will sell for just a tiny bit less than the one before, and so on.

Pricing Illustration

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Top Row ----> Properties on the market similar to yours, they're all priced the same.

          Bottom Row ----> Your property. It's priced just below the similar ones. If you were the buyer, which would you see first?

If you are constantly priced above the best property at the best price, you will most likely always be chasing it! You want to BE the best property at the best price!

Now in this scenario, because you've continuously allowed someone else to slide right under you in terms of price, the home that you originally put on the market for $350,000 (but in this market was really worth $335,000) may finally sell for $300,000 after you were forced to continuously reduce the price in $5,000-$10,000 increments for 8 months or whatever the time because you didn't beat those similar properties to the punch!

If you had listed your home at $335,000 originally, you could have saved $35,000 on top of all the expenses you were paying while your house was on the market. 

Suddenly that $335k doesn't sound so bad, right?