If It’s Been On The Market for 1 year… - Posted by David Krulac
Posted by David Krulac on February 27, 2002 at 07:12:10:
then something is wrong and its almost always is the PRICE or the Marketing. An old investor, who had bought and sold hundreds of properties, once told me that if a house is properly advertised, so that people know that its available and it hasn’t sold in 90 days, its overpriced.
Pricing and marketing are keys to sucess in the real estate business. If you don’t understand either you are doomed for failure in every market except the runaway seller’s market, where everything sells in days for more than asking price. Buyer’s panic fever will cause an overpriced house to sell. But the is not the norm and usually not long lived.
Some people short change the cost of advertising. We advertised in a very large metro newspaper for 5 days and is cost over $800. I currently have an ad in a weekly freebee paper that’s running for 6 weeks for $64. The first ad was for a $300,000 immaculate house that we sold the first week for more than asking price. If we had used the $10 ad for that house, I doubt we would have had the same sucess.
Price pointing is another key to marketing. Today with computer scans its even more critical. People search on price and use round numbers as the cut off criteria. Even realtor.com searches are cutoff by round numbers. I sold a house recently that was probably worth up to $105,000. There is not way that I would ever price a house between $100,000 and $105,000. People/real estate agents in there search
will cut off at $100,000 and not be aware of your house. I priced the house at $99,990 with a 65 commission instead of my usual higher commission. It sold is a few weeks for full price. that $10 less than $100,000 made a difference in selling.
Commissions are another marketing technique. Last year I sold property with commissions from 5%, 6%, 7%, 8% and 10%. Yes 10%! the commission matches the property. If a property is harder to sell or there is a thinner market, then I want to favorably distinuish my property so that it gets sold. The 10% commissions were paid on 3 rural properties about 50 miles away. The local area is sparsely populated and I figured that the larger buyer’s pool would have to come from the city more populated area. we were asking top price and sold in 2 weeks to somebody from the city.
Your marketing needs to include where to advertise, (a bandit sign on the rural property would not draw as much interest) how much to spend, price point pricing, and commission if listed.