Pricing Homes Like Duck Hunting

Posted by seanmatyja on May 11, 2015 in Uncategorized

Pricing a Home is Just Like Duck Hunting

“When they’re going up, you aim a little high.”

“When they’re going down, you aim a little low.”


I first heard that quote from a Realtor colleague a few years ago when our real estate market’s pricing was heading downward. At that point we all were unaware of how low pricing would go and hoped it was a temporary situation. She was making a point that no matter if the market is going up or down, the best way to price is get slightly ahead of it, just as if you were aiming at ducks flying through the air. It struck me as such a simple, yet clever observation.

Pricing in an Upward Trending Market

In today’s real estate market, we are fortunate again to see the trends of pricing moving up. But we should still be cautious in our pricing, and sellers who want to sell this summer should aim just a little high only if their market still seems to be moving up. We have seen this to be true many times in many markets. The prices keep increasing, and the sellers who step up their pricing in reasonable incremental amounts are successful in selling in a timely manner, and typically get their price or very close to it. The sellers who aim too high miss their target like a duck hunter aiming too high. They price too high, sit on the market, and eventually have to lower their price. Often, they will waste a lot of time on market, and often end up selling far off their list price. With the heated up real estate activity, we are seeing many sellers getting a bit too over-confident and pricing too high. This is more common in the hotter market segments and communities. This overpricing may cause inventory to sit, as buyers are typically OK with reasonable increases in pricing, but are reluctant to move up too much too fast.

Pricing in a Level Market

Many markets have begun to level off. In which case, sellers should price right along the same price levels other homes have listed/sold for. If the market is no longer moving up, it can be detrimental to price high and sit on the market. If you determine the pricing and sales trends in your neighborhood are at a level pace, neither going up nor down, it is best to price accordingly. You can know the appreciation has already occured, and is no longer climbing up. If your market has hit a peak, it may be too risky to try pushing it even further. There are always buyers out looking for property, so if you price right, you’ll still have a good chance of selling your home.

Pricing in an Downward Trending Market

Very few markets are still in decline, but with so many markets that shot up so quick recently in the real estate recovery, we may actually see a few pocket or sub-markets go through a slight decline. Depending on your needs and desire to sell, you may want to price a little under recent values to ensure a sale in a reasonable timeframe. Hopefully we do not see drastic decline in pricing as we saw back in 2008-2010. Those times were different as much was fueled by a near meltdown of the national financial system and an economic recession. When the prices are going down, there is only one way to price. You must get in front of it and price to get sold. Anything higher and you’ll sit on the market as prices continue to decline all around you. This is the most dangerous example of pricing being like duck hunting. if you price wrong in this scenario, the consequences can be extremely unfortunate, and there is no recovery or second chance, maybe for years.

Its Always Bad to Price Too High

Simply put, no matter what market conditions you are in, pricing too high has terrible consequences. Many sellers often think a realtor is just trying to get them to price low for a quick and easy sale, but as real estate agents we know the importance of pricing correctly. Accumulating days on market can be detrimental to a property listed for sale. The headache and heartache of being on the market, dealing with showing appointments and stress wondering about the potential buyers can drive a seller crazy. In our Steps to Success listing presentation we focus many of our pages on the importance of pricing accurately, and we include some amazing charts that help to illustrate this point to sellers. An educated seller is a much easier seller to work with, and they’ll understand the process better and realize the reasons and the importance of pricing accurately within their market.

The best way to price is to first determine if your neighborhood is trending up, down, or has leveled off. By looking at comps, and unit sales over the last few months an experienced “local” realtor can help determine what the trend has been for your neighborhood. Together you can decide where you think your neighborhood is headed and you can then price more accurately.

Article written by Sean Matyja. Sean is an experienced Realtor® and Associate Broker with Summit Sotheby’s Intl Realty in Park City, Utah. In addition to working in day-to-day real estate, Sean has created the Steps to Success Listing Presentation that many brokers and agents use today.

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