Selling before the neighbors do
More sellers seem to face competition from others on the same street. I recently walked along a block with units for sale in three consecutive triple-deckers. Michael Royce, the Concord homeowner I wrote about Friday, says six homes are for sale on his street.
With relatively few buyers in the market right now, it is particularly painful to consider the possibility that someone might like your neighborhood, your street, even the general style of your home -- and then make an offer on the home next door.
Boston largely is sheltered from the worst version of this problem, which occurs in new developments when several identical homes can go on the market at the same time. Our housing stock tends to be more diverse, in part because -- like twins -- identical homes tend to grow apart with age. A row of Dorchester triple-deckers built to the same plan a hundred years ago often look remarkably different now.
At the same time, the very density of Boston increases the odds that buyers will have other options in the same neighborhood.
What is a seller to do?
A recent article in Newsday suggests that neighboring sellers should coordinate open houses to lure more prospective buyers. It also quotes a real estate agent suggesting neighbors should list with the same agent, "Because they will probably try to show both properties at the same time." The first idea makes sense, the second idea seems suspect -- why not let two agents market your street?
A recent blog post by Bart Foster, a Somerville real estate agent, casts the issue starkly in terms of pricing: If a bunch of similar homes are for sale in the same area, Foster writes, the one with the lowest price will sell first. If similar homes are listed for $405,000 and $395,000, list yours for $385,000. If they drop their price, drop yours. "The trick is to realistically identify ones competition, price a smidge below and then to proactively maintain your competitive pricing advantage," Foster writes.
It's true of course that you can sell anything by lowering the price sufficiently. But one might also look to homebuilders. Rather than offer the same home at different price points, builders try to create superficial distinctions -- a customized kitchen, a different entryway, a brick front. A recent article in the Washington Times talks about some of the ways to make your home stand out from the neighborhood.
Seems to me this is an age-old marketing problem with two solutions: Undercut the competition on price, or make your product seem more valuable.
Your thoughts?
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