As you may have heard the market is changing. Now, more than ever, it is important to price your home to sell. Due to the low-interest rates and low inventory, we’ve had a fast-moving market for the past few years. At any given time there have been as few as 305 houses on the market. That’s not to say they don’t stick around for long though. As agents, we have collectively sold all those houses and more each month indicating a high absorption rate. A high absorption rate is usually associated with a seller’s market. This morning the amount of houses on the market is 596, almost double what we’ve had to work with. One reason for this is the interest rate. It’s gone from below 3% to 5.5% in just a few months. Although it’s not a bad interest rate compared to what we’ve seen in the past it’s still enough to change the direction of the market.
This market is moving from a seller’s market to a buyer’s market right before our eyes. I’ll explain what defines a seller’s or a buyer’s market in another post but for now, just know that the seller’s market is slowly disappearing. If you are a buyer then things may be looking better for you but what if you’re a seller? Since interest rates have risen there are certainly a lot of buyers who have lost their ability to afford the home they want. That audience has shrunk a bit. Investors flipping properties and homeowners making improvements to their homes have declined as well. Money simply isn’t as affordable to borrow as it was. One trend that is very noticeable right now is overpriced homes. Homeowners are hoping to capture what may be left of that great market we just had. Every day there are many price reductions because of this. A price reduction is like receiving a D on your report card.
It means you didn’t price your home to sell. Although the seller is ultimately responsible for this it reflects on the real estate agent. The seller is the one who pays the price of losing the momentum of what could have been a quick sale and for the most amount of money. In Real Estate this is probably the one thing that is most paid attention to. As agents, we are constantly fine-tuning this ability to help you price your home to sell. In this current market of transitioning from a seller’s market to a buyer’s market, it is absolutely crucial to get this right.
I’m going to share the secret with you. These 5 reasons to price your home to sell are tried and proven facts of real estate. Those who pay attention to these end up selling faster and for the most money.
Pricing your home to sell…
1. Produces a quicker sale. You’ll have your house in escrow within a week and be done 30 days after that. Most of us are busy. You don’t need to be on the market for months, lowering your price and hoping for an offer. You’re selling your home for a reason. You have plans to do something big in life. Maybe you’re moving closer to family. Maybe it’s a job opportunity or it just might be that you have outgrown your home and have your sights set on a bigger more capable home. In any case, you don’t need to put these goals on hold until your property sells. Having a quicker sale is part of the formula for your success with your real estate goals. So get your price right the first time and enjoy the benefits of a quick sale.
2. Generates broker and agent excitement. When a house hits the market, agents and brokers quickly do the research it takes to know if it’s priced right. If it’s priced right we call our clients and show it to them immediately because we know it won’t last long. That’s excitement. If the home is overpriced then it’s pretty hard to get our clients interested so the excitement just isn’t there.
3. Creates buyer urgency! Buyers are constantly looking at everything on the internet to find the house they want. They know what they qualify for and they know what’s available for that price. When they see something that is priced right that works for them, they call their agent for a showing and then put an offer in right away! This, coupled with the broker excitement, is what creates the multiple offer situation. When an agent calls me about a house that I have listed the first question is always “are there any offers yet?” That agent is calling because they have an interested client. If I get to say “yes we have multiple offers and will be going over offers soon”, they go over and above to get the home. It’s an amazing situation.
4. Attracts better offers. This is the good part. Let’s say your home is worth around $400,000 so you price it right and introduce it to the market at $395,000. Every agent, broker and buyer is going to see that this house appears to be a good deal! Nobody wants to be left out of a good deal so the offers start pouring in. Now you have multiple offers. This is proof to those agents, brokers and buyers that your home is in fact priced right. They still don’t want to be left out so they make an offer that is sure to get the property that is obviously priced right. It’s not uncommon to see a home go for 5, 10, 15 or even 20k over the asking price if it’s priced right.
5. Avoids appraisal problems. There is nothing worse than receiving a higher offer and then getting 3 weeks into the escrow period only to have the home not appraised. Now the buyer is gone and you have to start over. Let the market determine the price of your home by pricing it right in the first place and you’ll be much closer to the value that an appraiser will come up with. This is another key ingredient in the formula of being successful with selling your house and reaching your goals of moving to that new home on time.
In conclusion I hope this has helped you understand the importance of pricing your home right in this market. If you would like a professional evaluation of your home I will be happy to come to your property and meet with you. I’ll take some notes, do some research and then present to you a professional Competitive Market Analysis showing exactly what to expect from the market. You’ll then have the tools to Price your home to Sell!