- The Washington Times - Friday, August 24, 2001

Peter and Karen Agud tinkered for more than a year with their Annapolis town house, picturing the end-unit's value escalating with each new coat of paint, each improvement to the landscape.

All around them, town homes much like theirs were selling overnight for tens of thousands more than what the Aguds paid for the house when it was new in 1992. When the opportunity to transfer to North Carolina presented itself earlier this year, the couple was tempted to price high and test the waters.

"When it came time to price, we looked around us, and here we were: the end unit, surrounded by woods that are zoned for open space. At one time in early March, we were joking about putting the price at $175,000," said Mr. Agud, who will be closing on the sale at the end of the month. "But we knew we'd be pricing ourselves out of the market."

Pricing a home in a seller's market can be a challenge for several reasons. First, sellers' expectations are high, often unreasonably so.

"Sellers are saying, 'My neighbor just sold her house for $350,000. I'm going to get $365,000," said Marie Worley, a Realtor with Weichert in Manassas. "What they don't realize is that their neighbor priced their home right."

Conversely, in this still-unpredictable market, sellers may be able to command an outrageous price, despite lower comparables. Or, as Annapolis Realtor Liz Wojcicki put it: "It really doesn't matter what the last house sold for if there are five buyers."

Prices are often held in check by professional appraisals, which determine the amount a bank will loan clients for a property. But with more cash buyers looking for houses, prices aren't limited to the amount at which a home has been appraised.

"I always say, 'A house is worth what someone is willing to pay for it,'" said April Raimond, an associate broker with the Lanham-based For Sale by Owner Advisors. "It's neighborhood-to-neighborhood supply and demand. Some people will pay any price just to be somewhere special."

Because well-priced homes are selling quickly, a home that languishes is a sign that either the price or the property is faulty.

"Definitely, if you're not getting offers in this market, you need to look closely at the situation," Ms. Raimond said. "Most houses we're seeing are sold exactly for the asking price or close to it."

Buyers become wary when a house doesn't sell within just a few weeks of listing.

"If it sits on the market too long, people start thinking, 'What's wrong with this place? There must be a crack in the foundation or something terrible.' It turns a lot of people off," Mrs. Worley said. "About 50 days into the listing, we rethink the price. But by then we've missed out on a lot of potential buyers in that price range."

As the Aguds know, coming up with the right price is a complicated matter, especially in a market where there are few properties that are exactly alike.

"We had a ballpark figure that we kind of pulled out of the air," said Mr. Agud, who with his wife ended up selling the house with a discount broker. Houses in the neighborhood had sold for $114,000 to $162,000. The Aguds arrived at their listing price by factoring square-footage into comparable sales prices and adding a bit for the view of the woods that surround them.

It took three weeks longer than any other recent sale but the Aguds got their price.

"We were averaging one showing a day," Mr. Agud said. "I think the price was on-target."

The Aguds were wise to size up neighborhood sales, Howard County appraiser Mike Casey Jr. said.

"If you're in a new development, you can assume certain things about the condition that relate to the price," Mr. Casey said.

But in many neighborhoods, appearances can be deceptive. What look like duplicate properties from the curb may be very different inside.

In Mr. Casey's Laurel, Md., neighborhood, prices appear to be rising by as much as $10,000 a month.

"One house just sold a couple months ago for $369,000 and then another of the same model just got $389,000," the professional appraiser said. "What I don't know are the amenities and that may explain it a little bit better."

Indeed, a property's condition is still a major factor in pricing a property.

"It's the house that looks the best and has the least amount of work to do that people will buy," Mrs. Wojcicki said. Still, she said, "All it takes is one odd smell and people will react badly."

Judicious pricing uses the same criteria in a seller's market as it does anytime, Ms. Worley said. After considering market conditions for a neighborhood and property condition, she said she factors into price the amount of work that homeowners have done in the past five years. That doesn't stop homeowners from dreaming big.

"After all that, a seller will still just say, 'What was the highest price in my neighborhood?' instead of looking at everything else," Ms. Worley said. "Everybody seems to think they have the best house."

But having the best house isn't always enough. The best-priced house is the one that sells fast.

"Price it well and get ready. It's going to happen quickly, and you'll probably have a pick of contracts," Mrs. Wojcicki said. "You can still overprice yourself in this market."

More info:

Online
www.realtor.com. This official site of the National Association of Realtors contains a section called "Price Check," in which you can plug in a ZIP code and get recent home sales prices.
www.RealtyTimes.com. The Seller's Guide at this site includes instruction on getting started, negotiating a contract and closing the transaction.
Books
"Dress your house for success: 5 fast, easy steps to selling your house, apartment, or condo for the highest possible price," by Martha Webb. The author outlines her house-selling tips in five steps: uncluttering, cleaning, repairing, neutralizing and "dynamyzing." Along the way, she gives cost estimates for suggested improvements.


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