Four-plus years into the current real estate downturn, buyers and sellers find themselves on opposing ends of what can be difficult and drawn-out battles over home prices. Due to near-constant refrains of this being a “buyer’s market” many buyers are looking for significant bargains. At the same time, some sellers are reluctant to adjust to today’s home prices. Understanding market dynamics and consumer behavior is critical in this market.
The best way to prevent a long list time is to price your home realistically from day one. Homes that are competitively priced sell for 96 percent of list price within 30 days. Because buyers have already seen the existing inventory, there is excitement when a new home that meets their criteria comes on the market. If it’s priced fairly, buyers move quickly and are more likely to pay more. The inverse is true too; homes that are overpriced and/or not in good condition will typically sit on the market longer, making them magnets for very low offers and costing the seller more money in the long run. As you can see in the graph, homes have the greatest chance of selling in their first month on the market. The chance that a home will sell diminishes with each passing month and properties on the market more than six months often don’t sell at all.
Pricing a home is a complex task that requires research of nearby properties and homes that are similar in size and amenities. When performing this assignment, I complete this research on your behalf without bias. While your home is on the market, it’s wise to routinely to keep an eye on the comparable properties and respond accordingly. The competition is constantly changing and your pricing strategy must adapt as well.
Many buyers believe that sellers with long list times are desperate, and those buyers are more apt to make low-ball offers. This strategy is rarely effective, and could ultimately be counter-productive. A better approach is to work closely with your agent to determine how a home compares in price, size, and days on the market to other homes in the same neighborhood or price range. If it seems overpriced, make a fair offer and be ready to negotiate.
In the end, parties on both sides of the transaction want the same thing: a purchased home. Closing the gap between what sellers are willing to accept for their home and what buyers are willing to spend takes patience, respect, and, most importantly, a grasp of the realities of today’s market and home values.
Location is the single most important factor in determining the value of your home. The relative benefits of your property’s location will change the perceived value of your property.
Characteristics of your home
The value of your home is greatly based on the hard facts about your home, such as lot size, living space, the number of bedrooms and baths, the total number of rooms, and other features.
The condition of the property affects the price and speed of the sale. As prospective buyers often make purchases based on emotion, optimizing the physical appearance of your home will maximize the buyer’s perception of value.
Prospective buyers compare (evaluate) your property against competing properties that have similar features. Buyers will perceive value based upon similar local properties that are available on the market or that have been recently sold.
Property values are affected by the current real estate market. When properties are selling quickly, there is pressure on buyers to present stronger offers. Economic conditions may impact the availability of financing and impact the number of qualified buyers.
Pricing your home competitively from the beginning is an important factor in determining the length of time it will take to sell your home. Your Asking Price plays a significant role in determining which properties will be considered by a prospective buyer.
The amount of positive exposure that your property receives can potentially affect the demand for your home. In ideal circumstances, multiple buyers will compete for your home.
Your timing requirements for the completion of the sale, may impact the final price that you accept .
The negotiating skill of your real estate specialist may have significant impact on the final return that you receive from the sale of your home.