HILL COUNTRY HOME SELLERS: WHY YOU ARE GIVING AWAY YOUR PROFITS?
August 4th, 2008 categories: About the Local Market, Assessing the Local Market
According to my article posted last week,
JULY REAL ESTATE SALES UP IN COMFORT ISD AREA
Sales are up but Sellers are having to negotiate more on price than they did last year. In July, prices were being reduced an extra $3550 (per $100K of List Price) in order to get the sale as compared to last year. What’s a Seller to do?
#1 START WITH A REALISTIC LIST PRICE
A List Price based on a realistic estimation of the current market (the competition in your price range, how many homes have sold in that price range in the last 6 months, and what the trend is in the market) and realistic negotiating room is absolutely essential not only for getting your house sold quicker but getting it sold closer to list price.
The chart above reflects the following: If you price a home correctly, more prospective buyers will view your home. If you price it too high, only a small number will view your property.
The key to getting a home sold is getting a large number of the RIGHT people in your door. The RIGHT people are those that have been looking in your price range, look at your house and feel as though your home is valued properly (e.g., they give good feedback).
When the RIGHT people view your house and feel that your house is a good “VALUE” in your price range, they are motivated to want to submit a contract (in order to capture the good deal and take it off the market). In a buyer’s market, this is what you want to accomplish!
If it is not priced correctly, potential buyers feel “SO SO” about the house and they don’t feel any urgency to act on it.
Properties with “SO SO” feedback stay on the market until either: someone gets interested enough (and daring enough) to make a low enough offer to make it worth it to them or it will stay on the market until there have been enough price reductions to finally motivate a buyer. More than likely, the latter will end up happening because many (I think most) people don’t like making “low ball” offers. Why? Because it takes time and it can be emotionally draining to them.
Just think about it! There is risk involved and who likes to put an offer on a house and then not get it? … Or decide they don’t want it at that price. Or whatever! It just can be exhausting to many people. Especially if feelings of failure and/or a sense of wasted time is stirred. Who wants that?
What you DO want to create is the emotional statement,
“This is a good, fair deal!
I am willing to pay somewhere close to the asking price …
So that’s not emotional for me! It’s ENLIVENING!”
Based on the above chart, if your home with an actual market value of $250,000 is priced at $287,500, you will likely only reach 10% of the potential buyers. OUCH! PRICE YOUR HOME TO SELL NOT TO SIT!
#2 MAKE SURE YOU TAKE ADVANTAGE OF THE OPTIMAL WEEKS OF THE LISTING!
Based on the chart below, you will see that the optimal time in terms of market activity is the first three weeks of the listing period.
Agents who are watching the market for buyers in the price range of your house will take note of the new listing, will preview it and then show it to their clients.
IT IS SO IMPORTANT TO UTILIZE THIS OPTIMAL PERIOD WISELY! You want your house to SHINE against the competition. Especially to real estate agents who do KNOW the market and will know if your house is priced correctly.
Real estate agents other than the Listing Agent are a Seller’s best resource! The key is to get them to love your house! Remember, it is the job of a Real Estate Agent to find something that their clients might like! And the first few weeks your home is listed is likely going to be the ONLY time that agents that really SELL your area will see your house (particularly if it is not priced properly. ) Even if their first client doesn’t buy, you want them to show your house AGAIN and AGAIN and AGAIN …
It so grieves me to see a property overpriced because if those looking at your property during this optimal period (Buyers and Agents alike) don’t think your property measures up, you’ve pretty much wasted your optimal period.
Price changes don’t recreate the market activity bell curve. Just a slight bump in activity … And it takes price change after price change to compensate for the opportunities lost. Likely, your house will end up being on the market longer (which equates into higher carrying costs – mortgage, electricity, etc.) and the market will lose interest in your house until it is finally priced UNDER market. That finally gets peoples attention again! A very sad story! So, What is the moral of the story?
“Don’t risk losing prospective buyers by improper pricing.”
We truly care about our clients and try to give the BEST advice possible for your ultimate good. If we can help you in any way, please give us a call! 830-995-2511 Julie or Buddy.
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