Check Your Emotions at the Door
The art of apartment pricing
Perhaps one of the greatest assets a good real estate broker brings to the table, besides years of experience buying and selling homes and expertise in your particular market, is emotional distance. Sure, we care about you as a person, and we may even be (or become) friends, but you can bet we will stay focused on the task at hand. That's because we will never be as emotionally connected to your home as you are. Not to mention that we aren't facing the daunting prospect of packing, moving and readjusting our family to a new apartment, building, neighborhood or possibly even a new country.
So when we approach the question of how to price your apartment, we look strictly at the numbers, with no room in the conversation for wishful thinking. You may have heard someone talking about "running comps." This is the process of reviewing similar apartments currently on the market, recently sold units and, if there are any, similar units that are in contract but not yet sold (since this is the most up-to-date market data available). After reviewing the comps, your agent should present a price range in which they think your apartment will trade, and encourage you to price it somewhere in the middle, possibly even toward the lower end if we are in an active market.
As long as an apartment is priced where the market suggests it will sell, or even slightly below that number, it will sell quickly, and you might even receive multiple offers. That's ideal, because it allows you to choose the most qualified buyer whose timeline best suits your own. Certain price points (under $1M, for example) and certain neighborhoods (Harlem, say) may outperform the market at large, and you may get a surprising amount of "lift" on the price. After consulting with my sellers, I once underpriced a unit in Central Harlem, and we ended up with eight offers, the highest of which was nearly 10% over the asking price, and all-cash. So while I wouldn't recommend underpricing too much, pegging the asking price just slightly under where you think it will trade can be a winning strategy.
