ACCURATE PRICING IS CRUCIAL
LONGER MARKET TIMES AND PRICE REDUCTIONS ARE VERY STRONG INDICATORS THAT SELLERS WILL NET LESS UPON CLOSING
The housing market has been plagued by a limited inventory for years now. Buyers eagerly await a fresh supply of available homes that best match their wish list. They regularly check their home search apps for anything that hits the market. Home buyers scour every photograph, every feature, and every detail of each home within moments it is listed FORSALE. It is during the first week of coming on the market that a home obtains the most attention. Buyers scrutinize the pictures, looking at condition, upgrades, amenities, style, curb appeal, and location. But, even more importantly, before climbing in a car to tour a home, potential purchasers will carefully analyze the asking price.
Correctly pricing a home initially, especially in a market slowing from week to week, is critical to secure a successful outcome and to walk away with as much money as possible. Armed with the knowledge of what they can afford, seasoned buyers have seen many different homes. Some look like a model, and others have plenty of deferred maintenance. They have seen homes that have been upgraded and updated and have alluring amenities. More importantly, they are very familiar with proper pricing for their specific needs. When a home first comes on the market, buyers immediately look at the price in relation to what the house has to offer. They can easily discern when a seller is being a bit overzealous and is stretching the asking price.
Price is ultimately the most critical first impression of a home. Sellers only get one shot at this first impression. After the initial ten days of coming on the market, most seasoned buyers have seen the home. Some decide to tour the house, yet others, after considering all the details, decide that their “phone tour” is enough and they are not interested in pursuing it any further. The longer a home is on the market, the less fanfare and excitement the property receives. Even if a seller reduces the asking price down the road, it is not met with eager buyer anticipation and enthusiasm. Currently, 27% of today’s active listing inventory has reduced the asking price at least once. The data illustrates that lowering the asking price or stubbornly waiting to get a price is not the best strategy.
Excerpt taken from Stephen Thomas
