
By: Jeremy Moncur
The most important decision you make when selling your house is the sale price. Whether your main priority is getting top dollar or selling as quickly as possible, pricing is still your central decision.
When it comes to pricing, there are three main strategies: overpricing, pricing at market value and under pricing.
To visualize the effects of pricing, I looked at over 1000 single family homes sold on Oahu over the last six months (from $900,000 dollars and under) along with all current listings with the same price cap. The following graphs show the correlations between list price, sold price and DOM.
While this isn’t completely reliable info since have we no idea which homes these were and what conditions surrounded the sales, it still demonstrate a few trends to keep a tight grip on when pricing your home.
Overpricing
Many homeowners think that overpricing will give them wiggle room to negotiate. Honestly, I don’t blame them. Because why not see how much you can get, right? Well, in reality, overpricing exposes your property to a smaller crowd, takes longer to sell and often results in a lower sale price.
I call overpricing, the “anti-strategy.” In the chart below we see that the highest priced properties are also the ones that sit on the market the longest. In contrast, the properties that sold quicker we’re priced pretty close to their final sales price.
If you're serious about selling quickly and for the highest amount, I wouldn't recommend overpricing your home.
Price vs. Days on Market

Pricing at Market Value
This is the method most Realtor’s encourage. A well priced home should generate interest right away and typically takes no more than a month or so to get offers on. In certain areas of the island where demand is higher, even that is longer than it should take.
This holds mostly true even in country areas where the market’s a bit slower. I recently listed a nice older house for $549,000. It’s a 3 bed / 1 bath, 1000 sqft house with a 5,000 sqft lot. Not to pat myself on the back too much, but that price was right on the mark. We had showings most days and got an offer just over our asking price on day 14. And now, a month into our escrow, I still get agents checking in to see if there’s a possibility it might become available again.
Pricing right is a safe and smart move.
Under Pricing
This is the other strategy sellers use. It can seem risky, just like starting an ebay listing for your used cell phone at $0.99. But, starting at a lower price tends to attract more attention. In fact, underpriced properties are meant to create a bidding war atmosphere. And, if done well, they often work. More often than not, this leads to a fast sale over the asking price.
This can be especially useful in a buyer’s market, where seller’s have to find a way to stand out from the competition. Pricing just a bit below your competition can be the secret to getting the sale you need.
The next two charts show the relationship between the length of time a property sits on the market and the price it sells for. Again, not 100% reliable as there are a lot of factors in each sale, but the general trend seems to ring true. The longer your home sits on the market the less you'll get relative to your asking price.
DOM vs. List Price vs. Sold Price

*Days on market is a great indicator of a houses pricing strategy. The ones that sold in under 22 days priced their home very close or even slightly under market value. The ones that approached that 45 days and over period were over priced and sold for less relative to their asking price.
DOM vs. Difference Between List and Sale Price

*Just another way to view the graph above this one. Here, we see how under pricing tends to get a higher sale price in a short amount of time whereas over pricing delays a sale and gets a lower price relative to the asking price of the property.
And Now What?
Hopefully this data gives you some good insights into pricing your home when the time comes. The only question left is what is your home worth?
We’ll that’s a different post and it’s coming soon so stay tuned!

Jeremy Moncur, MBA/RA

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Staples Realty, Inc.
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Kahuku, HI 96731
jeremy@stapleshawaii.com
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