Why I need $30,000 more than your suggested price.

Here we are, 2 years into this crummy market and we still run into people who have an “I Need”. What’s that, you say. Well here’s one of many “Monty-isms” to come. (That’s what a friend of mine calls these little bits of wisdom that come rolling out of my husband’s mouth with ease, eloquently and on time.) When he first started using this analogy, I thought it was silly, but it really works.

When we talk with sellers, many times they are surprised by the affect of the market on their home price. We go and talk to them and we do detailed research before the appointment. ( Many agents will use the PFA (plucked from the air) method to pricing. I can’t do that. Since I have an appraisal background (even though it was for only one year, this experience runs deep) I try to do as thorough a job as possible. I don’t like to lie to people and I don’t like to raise false hopes.


So, we prepare, we research, we drive by solds, we call selling agents, we look at tax records, we make adjustments, we create a detailed presentation and we march off to see the seller. We smile, we talk, we laugh, we look at the house and then.... we sit and talk about the price.

Every now and then, the seller says “we can’t sell for that price!, we need XXXXXX and usually that translates into several thousand dollars above what we gave as our educated opinion!

When the seller(s) announces that they need to sell for much higher than what the market is showing – after all, they need to have money to move, they need to have money to buy furniture for the new house and they need money to go on vacation before they move and many other things.... This is when my husband delivers this classic Monty-ism:

“Suppose you went grocery shopping and filled your basket with all your needs, bread, eggs, cereal and many other things but no milk. As you are waiting in line, the manager looks in your basket and notices that you have not purchased any milk. He stops and asks you about it ‘Madam, I can’t help but notice that you haven’t purchased any milk. ‘ You reply, ‘No, I didn’t buy your milk, it’s $6 a gallon.’

The manager patiently explains ‘Well, you see, we own our own our own dairy farms and herds. We milk our own cows, we process the milk, bottle it and ship it – we have total control. Recently, our herds were decimated by a rare disease and we had to buy all new cows. It took a while for them to start producing. We were down for months and just now got back into operation. We’re trying to recoup our costs and that’s why our milk is priced at $6 a gallon.’

You’ve been nodding patiently, but you reply to the manager ‘Listen, buddy, I’m sorry to hear about your cows and that you NEED to get $6 a gallon, but I can buy it anywhere else in town for $2.50 or less – why would I buy your milk for $6?’”

Moral of the story:

That’s how buyers will evaluate your home. If competing properties are selling for less, they don’t care what you need. Their heart might go out to you and they might feel your pain, they might think you’re a heck of a guy, but they are not going to overpay for your home. They will engage in comparison shopping and will soon determine whether or not they will pursue your home and if so, what price they would offer.

Pricing is not a science. Just remember,

• you want to be competitive in the market
• you want to be realistic
• you don’t want to help sell the house down the street that IS priced right
• If your house is priced too high, buyers will go see your house and others similarly priced. If your home doesn’t deliver the same value as the others in your price range, yours will not sell.