How To Sell That Condo

Seller’s expectations are still too high when it comes to price. How do I know? Look at our Zip Code of the Week (below). November to December 2007: 163 Orlando condos listed – 6 sold = 157 unhappy sellers. True, there may be several reasons for the lack of sales – one of which is that buyers can be incredibly slow to catch on, and also the fact that it’s harder to get a loan these days – but in most cases, the seller is still hoping, against hope, to get what they think they deserve - instead of waking up to the reality of today’s market.

Buyer’s are are cherry-picking the best condos from each community – but if you’re truly motivated to sell and just aren’t sure how to price your Orlando condo, you might want to consider ‘absorption rate pricing’ (ARP) – which asks not how much you want – but how quickly you want to sell.

sold condoStep 1: Work with your agent to find out how many Orlando condos entered the market in the past 6 months, how many sales closed during the same period.

Step 2: Do the math and divide the closings by the listings. Using above numbers, if there are 6 closings out of 163 listings, then you have about a 3 percent chance of selling your condo in that zip code in that time frame. Ouch!

Then do this: Figure out how many sales fitting your search criteria were closed in the past year and divide that number by 12. You’ll now know how many condos closed per month (on average). Divide the number of listings by the average closed per month and that will tell you how many months of condo supply exist in your chosen market. I’d do the overall Orlando condo math for you, but I won’t. Because if you’re a seller you’d probably burst into tears. (How does 18-24 months sound?)

Using the ARP method, you can figure out how aggressive you need to be using time instead of price as your yardstick. If you desperately need to sell in the next 3 months and there is a two year supply of condos, then you may need to get real. Look at the prices of the condos in your own development that have sold and price your condo in that ballpark – or just below, because the unhappy truth is that in many parts of Orlando, there are only two hopes that you can sell your condo – no hope – and Bob Hope… unless you do something pretty drastic to make it attractive to a smart, bargain-hungry buyer who just knows they deserve a great deal.

Absorption pricing will give you a sixty day price, a ninety day price and so on. It doesn’t guarantee a sale – but you should get a couple of sniffs at least. The rest is up to you.

1 Comment

  1. Wow, Marcus I couldn’t have said it any better myself. Great post!

    The only thing to add is make sure your condo is the best looking one in its price range and area. That means spending a few dollars or doing some of the work yourself.

    Excellent Blog Marcus…keep up the good work.

Leave a Reply

Your email address will not be published. Required fields are marked *