WASHINGTON -- In a hot housing market, it doesn't seem to matter what price sellers put on their homes. Whatever you ask, someone will offer more.
But in a slow market, pricing is key. Price the place too high and it will languish, soon taking on the aura of a white elephant.
Yet the key isn't so much your asking price as it is how fast you want to sell, said Zan Monroe, a senior instructor for the Council of Residential Specialists based in Fayetteville, N.C., and proponent of "absorption-rate pricing." If you've got time on your hands and are in no real hurry to move, then, yes, you can offer your place at the high end of the market. But if you want out fast, you have to be much more realistic. You need to find the price point at which your house will sell as quickly as you need it to.
Absorption-rate pricing isn't new. Practically every type of business uses the technique. But it is new to real estate. "Our industry is just now catching on," said Monroe, who teaches agents how to help clients determine an asking price commensurate with their need to move on.
First, realize that only a certain number of houses will sell in any market, strong or not, in any given time period.
To determine the odds that your house will sell, you'll need help from an agent whose firm participates in your local multiple-listing service. You'll need to know how many houses were on the market in the last six months, how many sales closed in that period and how many new listings were entered into the MLS during the same time frame.
Six months is the perfect time search, Monroe said. Any longer presents an inaccurate picture because the same house may drop off the market and come back as another listing. It appears as two different properties, when in fact it is the same.
Let's say there were 53 closings of the 128 listings that entered the MLS in the last six months. That means 41% of the houses that entered the market sold. So the odds of your place selling in the 180 days after you put it on the market are just over 40% -- regardless of how low the price. Most people find this exercise rather sobering. "I've never met anyone who considered the fact that their house will not sell," said Monroe, the real-estate educator. "But in some places right now, there's only a slim chance, if any."
Remember, you can cast as wide a net as you want. Or you can drill down to, say, your own neighborhood, a certain price range, school district or even house style. The more detailed the search, the more accurate the results, Monroe said.
