Another question we’ve gotten is “What’s the cost of not pricing your home right in the first place?”
Have you ever heard of “CONPIR”? I know it’s something I made up Cost Of Not Pricing It Right.
Let’s look at what’s going on and break it down as to what it’s costing you while the house is trying to sell. Let’s just take an example: we’re gonna take one here today for say a $300,000 home. Maybe you had put 20% down on it so you basically got a mortgage of about $240,000. But what do you need to think about?
What are these costs that are going on while you’re not selling
You have the monthly mortgage payment on $240,000. That is $1,176.50.
Then property taxes of say $3,500 a year. That is $291.70 per month.
Don’t forget homeowners insurance. Let’s say $70. per month.
All your utilities – Electric, Gas, Water, Yard Maint. There’s $410. per month
Add All that up and you have – $1,948.20 a month that you’re spending while this place is not selling.
Now of course other people will say it’s the realtors fault. And you’ll notice sometimes something doesn’t sell for a few months. They turn it over and give it to another realtor, then another. Now we’ve gone six months, now we’ve gone nine months, now we’ve done 12 months.
What happens let’s take a look at those numbers. So if you’re doing that almost $2,000 a month in six months you’ve spent basically $11,689.00. At nine months you’ve spent $17,500.00. and in a year you’ve spent $23,378.00.
All that money spent because you said you wanted to get extra by pricing too high in the first place. You said, “oh I’m gonna get this extra price I’m gonna hold on.” So now what happens in reality is normally if it should have been sold for $300,000 and you pushed for $330,000.00 Now you start bringing it down bring it down. People are wondering what’s going on because you’re chasing the market down. And then you’re going to end up finding you’ve got some real numbers to look at so let’s take a look at those.
Alright, It should have been at $300,000 and you had it at $330,000 so then when you chased the market down. Meanwhile all the houses around you have been selling because you were priced wrong and they weren’t. So by the time you get your price down to market buyers impressions will be that something is wrong with your house.
So you’ll probably end up selling for $290,000. Let’s say now because you waited so long, from our numbers we looked at before let’s say it takes you nine months cuz you’ve gone through two or three different realtor’s at three months each. So in nine months you’ll have spent 17,533.80.
Now look what you took home after all this is done. ($272,466.00)
That’s how much is your get to put in your pocket because you waited nine months because you had to have you priced it wrong. Let’s keep going now! If you had taken that same house and you had priced it at $300,000 like you should have and you know the market says that’s what it’ll go for, and now you find out that someone’s gonna buy it. There’s a good chance that you’re going to get your price of $300,000 or very close to it. And so let’s say that they give you a normal offer. It might take month then to get the things sold and then it’s going to take maybe another month or month and a half to close. Let’s just look at that and say two and a half months at our $1,940.00 that gives us $4,870.50 that it costs you while we’re waiting for this thing to get closed.
So now you got a total of $295,129.50 in your pocket. That’s your money back to you. Where the other way if you wait in six months because you priced it wrong you only ended up with $272,466.20. Which would you rather have? I think I’d rather have the larger number, wouldn’t you?
That way if you price it right you have a better chance of getting it SOLD in a short time with less expenses that you’re covering while this thing’s on the market. Now that seems like, you know, maybe that’s not too much for you. But think about it! When you go to price it right cost of pricing it at the right price! What are we calling it again? “CONPIR” Put it at the right price first. Get the numbers as close as you can so you’re not chasing the Market down.