The following article includes views from Reports on Housing by Steven Thomas, economics expert and experienced real estate executive, and is not a reflection of the opinions, views, or predictions of Nuvision and its representatives.
Today’s market is an extremely Hot Seller’s market. Sellers frequently receive multiple offers close to their asking price, and sometimes, offers above it. But even with advantages on the seller’s side, there is a chunk of homes, about 33%, that continue to sit on the market for months.
There’s no lack of demand. Even though it’s dropped 3% in the past two weeks, demand has been unaffected by COVID-19. At this time last year, there was actually 26% less demand than today. The problem for sellers lies elsewhere.
When a home is put on the market, the price dictates success.
Even when there is high demand and low inventory, buyers have the sense to wait for something reasonably priced. They might be slightly more flexible with their budget than usual, but not much, and sellers shouldn’t expect people so anxious to purchase that they disregard fair pricing.
It’s telling that, on average, sellers who reduced their asking price by 1-4% received only 95.4% of the original list price. That means a home listed for $733,750 would need to lower the price to $700,000 to attract buyers.
Accurate pricing means you can sell quickly and earn more.
The first few weeks of market time are the most important. If you miss this window of opportunity, you’ll likely be forced to lower the price to find success. A home that starts overpriced won’t be taken seriously by buyers and will end up selling for less later on.
This is especially true with internet home search services. Buyers often receive emails when new homes are added to the market. If your home is passed over on this first look, it’s going to be difficult to find buyers later on.
Even if you reduce the price to Fair Market Value after a few weeks, you’ll have lost many potential buyers. The excitement is gone, and your offer is no longer new. You’ll have to settle for less in order to attract them—meaning “testing the waters” with a high initial price will cost you in the long run.
Don’t waste the crucial first few weeks on the market.
Sellers can have a hard time separating the sentimental value of their home—all the memories and years spent living with loved ones--from the Fair Market Value. The best way sellers can ensure success is simply to enter the market with a clear head and reasonable price, one unaffected by wishes or emotional attachment.