As we all know, the time to think about selling, is when you buy.
There is nothing like a power point presentation with charts and demographics to support the position that if you buy it for $50,000, sell it for $80,000 and your expenses are $20,000, your pretax profit is $10,000 per unit.
What's not to like about this deal? It is the "if" word that becomes so overlooked until sales don't meet projections.
Regardless of the market, remember two imperatives, if your primary market is first time home buyers.
First time homebuyers would rather buy a house. If they cannot buy a house, they will look to town homes, because they are the closest thing to a house they can find. Your condo flats are running a poor third assuming competitive pricing. That is why your prices have to be stunningly impressive. "Price" is the ultimate amenity.
Your prices should be at least 20 percent less than the foreclosed single family homes in the neighborhood. For the same price, you will lose part of your market to the homes.
The five most common pricing mistakes for condominiums are easily correctable with an understanding of the principles involved:
- Negotiating prices, which destroys trust in the value. Price it so you can slowly raise prices. Yes, you can!
- Lazy pricing. Not using unit floor, view, and price differentials to establish inventory urgency and basing pricing on square footage alone are not good ideas.
- No incentive to buy now. The buyer has nothing to lose by waiting.
- Not enough price differences for view, forcing the best units goes first, leaving the units with the least appealing views to appear to be too expensive
- Not understanding the critical part 'pricing' plays in building momentum.
If you are a "buy and hold" condominium investor, your job is a lot easier.
If you are a 'buy and retail' condominium investor, think through your pricing and pricing strategy before you make the fractured condominium purchase. It's worth the time and effort.
Published: June 10, 2010
Use of this article without permission is a violation of federal copyright laws.
 David Fletcher has been a Florida real estate condominium and new homes broker for 30 years with more than $3 billion in new construction sales. In 2008, Keller Williams Realty International named him a "Lifetime Achiever."
Along the way he has chaired the Florida Homebuilders Associaiton Sales and Marketing Council, trained thousands of general agents and on-site agents to work together, and was a featured speaker at the National Association of Realtors.
Recently he founded New Homes Niche, a builder-certified co-broker training system "to meet the growing trend we see in short sale buyers moving to new homes for a lot of reasons."
Call David at 407 234 2349, , and visit his website.
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