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Real EstateUnder Pricing
Woody Hayes of Ohio State fame was once asked why he didn’t use the forward pass more. His quick retort was: Just like the forward pass, when you decide on a price for your home:
Fred’s Horror Story
A friend of mine, we’ll call him Fred, owned a second home in one of the fastest growing markets in the United States. He decided to try the “For Sale by Owner” method to sell it himself. He thought it would be easy. It was! He walked to the curb with a $2.00 “Home For Sale” hardware store sign, and nailed it to his split rail fence, then went inside to do some minor clean-up, fix-up. Within an hour came a knock on the door. It was buyer number one. The potential buyer toured the four year old home and within three hours bought it for “full price”. My friend was thrilled! He had managed to sell for his price; for cash; and a seven day closing; with about a half a day of preparation. Two weeks after closing my friend found out that the buyer had resold the home for a $40,000 profit. The buyer had never even moved in! Yes Fred saved the cost of a real estate agent’s commission, but because he didn’t do any pricing homework he left an additional $40,000 in profit on the table. Lesson learned . . .
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