Part of the reason so many houses here in the Rocky Mount area stay on the market for so long is that many are overpriced.
There are many reasons why Realtors list homes that are overpriced but that's not the topic of this post. I want to stick with the benefits of pricing your home correctly from day one.
The bottom line is that pricing your home correctly on the first day it is listed should lead to a quicker sale at a higher price. How can this be you ask. Let me explain.
The first couple of weeks your home is on the market are the best time to sell it. Since it is newly listed it will enjoy the most exposure, existing buyers will want to see the new listings, and agents will search for new listings several times a week. If it is priced correctly you should receive serious offers fairly quickly.
What is a properly priced home? That is a home that has a justifiable price supported by comparable SOLD properties, a home's physical condition that supports the asking price, and the comparable location of the home as compared to the SOLD listings.
What happens if it is not properly priced on day one? For purposes of this discussion let's say the home is listed for $150,000 but should have been listed for $130,000.
First, a good buyer's agent will know it is overpriced and either not include it for showings or explain that it is overpriced thereby reducing the likelihood the buyer will want to see it.
Second, if the buyer is qualified for a loan amount of $120,000 and they have a $10,000 down payment that totals $130,000 to buy a house. Their Realtor will search for homes that meet their criteria within their price range and will never see the overpriced home even though it may be a great home. This situation typically results in few if any showings. It's awful hard to sell a home that isn't being shown.
Third, buyers who are looking in the $150,000 price range will find and look at the home. However, as it is overpriced by $20,000 and truly will not compare to the homes that are worth $150,000. Therefore, it will be rejected by these buyers. This situation typically results in several showings but no offers. It's awful hard to sell a home that doesn't receive any offers.
After months of being on the market Mr & Mrs seller are ready to reduce their price to a more justifiable price. The first problem is that the person who would have thought is was the perfect house for them has already bought another. Next, once you start down the reduction path potential buyers start to think something is wrong with the house. Why else would you be reducing the price right?
Another problem is that your house has been on the market now for months. Every buyer asks "How Long Has This House Been On The Market". Again, the longer the house has been on the market usually means two things for a potential buyer. Either something os wrong with it or the sellers are becoming desperate to sell. Neither of these assumptions may be true but both effect whether this buyer will want to look at the house and ultimately how much they will offer if they choose to do so.
All of this could have been avoided if the house had just been priced properly to begin with.
How can you avoid this from happening to you? Work with a Realtor who understands the market, knows how to properly price your house, and can justify and document their suggested list price.
If you are thinking about selling your home give me a call. We can schedule a no obligation consultation to discuss this important subject.
David C Recker, Associate Broker, Realtor ® licensed in North Carolina. Reach David at: 252-442-2687
Copyright © 2008 By David C Recker, NC Real Estate Web Blog. All Rights Reserved.. *Price It Right>*
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