familiar with it. He submitted their asking price, and the Bank accepted it.
ERRORS IN PRICE ADJUSTMENTS ARE COSTLY
There are times when pricing adjustments may need to be considered. For instance, let’s look at Tim and Sue’s situation.
Comparable Home A: $368,000 Comparable Home B: $349,000 Tim and Sue’s Home: $345,000 Comparable Home C: $345,000 Comparable Home D: $333,000 Comparable Home E: $329,000
Tim and Sue appear to have priced their home competitively for the market. However, over the next month, the market changes.
Comparable Home A: Expired Tim and Sue’s Home: $345,000
Comparable Home B: $339,000 (Reduced Price) Comparable Home C: $335,000 (Reduced Price) Comparable Home D: Sold Comparable Home E: Pending Comparable Home F: $326,000 (New Listing) Comparable Home G: $325,000 (New Listing) Comparable Home H: $319,000 (New Listing)
Tim and Sue now have the highest priced home in the area in their price range. When a buyer looks at the comparable home prices, it is now the worst value proposition in the marketplace. Most sellers, like Tim and Sue, do not realize the market can shift quickly. It cannot be stressed enough how important it is for you to price your home right the first time. House D sold, and House E had a pending sale from the start.
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