This is the third post on a 5 post series. There is nothing worse than putting your house on the market to find it sits with no offers and the listing contract expires, with your house unsold. In post 2, we talked about how important effective communication between the real estate agent and the seller is to a successful sale. In part 3 we will talk about pricing.
Pricing Review it with your Agent
Pricing is the single biggest reason why homes sit on the market unsold. It is time to review the pricing of your home. The correct price for your home is the highest price the market will bear. It is time to review a new Comparable Market Analysis (CMA) and what fair market value is on your home. Many times, the first time around a seller is confident in their home and fail to realistically look at the data and run strictly on emotion. It is time to remove the emotion and home in on where the market is for your home.
Remember fair market value is good for one day only. Assess the general direction of the market. As of today there are still communities around me that are losing around 1% a month. Six months on the market with no offers or price changes and you are at least 6% overpriced. Pay attention on a regular basis to current market conditions. In today’s real estate market you need to price right at market or slightly below so you are not chasing the market down. Overpricing even 5% can hinder a successful sale.
How do I know if my home is overpriced?
If you have had plenty of showings with no offers or if you are not getting a steady flow of showings, you are probably overpriced. For most homes, I would say that you should receive an offer in 12-15 showings and in this market you should receive 12-15 showing in no more than 30-60 days. Right now when I analyze different markets, most homes need to be with-in 3-5% of their sell price before they are sold. Any home extended 3-5% past fair market value could sit on the market unsold. Check out this article about Price to Sell or Pay the Price Later. Some other things to look at that can indicate your home is overpriced:
- Did you get offers but they failed, do to negotiations? If you received offers but seemed to fall apart in negotiations in a certain price range, then you are probably overpriced and the buyers indicated what fair market value is for your home.
- Did you get overwhelming feedback from agents and buyers indicating your home was overpriced? One comment doesn’t make for a change. When you get one response after another, it may be time to re-look your pricing strategy.
While price is one of the biggest reasons a home expires unsold, don’t be to quick to jump to the conclusion look at all the possibilities and lay out a well executed plan with your real estate agent to get your home sold the second time
Re-listing your home- THE DREADED EXPIRED LISTING!!