Aug. 23, 2018
Jim Sells Where Others Fail
There are several reasons why properties languish on the market and take a long time to sell… if ever. Let’s talk about the obvious one – Price.
The biggest mistake a seller makes after they have decided upon a price for their property is believing that their property is priced okay even if dozens of buyers go through the house and no one makes an offer especially if the feedback they get only includes complaints about the location, floor plan, yard. This situation is only compounded when the feedback is good and sellers are hearing buyers say how beautiful the property is. Folks, whether your property is in an undesirable area/location, whether it is too small or even too big, whether it is a fixer-upper or even a tear down, it can sell very quickly if the price is right. On the other hand, if you have a gorgeous property in an ideal location and totally updated, it will take forever to sell if it is overpriced. There is a buyer for every kind of property, but only for the right price. Buyers compare houses one to another and through the process of previewing, eliminate those that do not fit what they are hoping to find based upon location, floor plan, price, and appeal (smells good, looks good, feels right). Therefore, if your property has been on the market longer than the average days on market of previously sold properties, your listing is over priced – even if it is the nicest home on the market. Another way to put it is this: If your property has been on the market for 21 days with few to no showings or if you have had 21 viewings with no offers, then the market is rejecting your property at its current price point.
Sellers who have competent representation by Certified Negotiation Experts should under price – not over price – their properties to begin with. By underpricing your property, you create an excellent opportunity for bidding wars among potential buyers akin to an auction which will drive the price up to or above market value.
In this way, buyers are the ones who are stressed out about how high to go with their offer price; whereas, when sellers overprice, they are the ones who stress out over how low to go so they don’t lose the offer at hand. Here is a real-life example with one of Jim’s listings: Sellers wanted to list at $1,100,000 but the market did not support such an asking price. Jim suggested listing between $1,025,000 and $1,050,000 to maximize the number of prospects willing to look at the property. Open houses were held for an hour on Saturday and 2 hours on Sunday to give everyone an opportunity to view the property. Offers were to be received by Monday evening. By Monday evening, 5 offers had come in and after several phone calls to give everyone an opportunity to make their highest and best offer, the property went under contract for $1,087,000 – $62,000 more than asking. Another property on the same street started out at $1,149,000 and after 3 weeks was reduced to $1,099,000 – without success. After another 3 weeks the price was further dropped to $1,069,000 and finally sold 2 weeks later - $1,035,000. Property 1 was on the market for 2 days. Property 2 was on the market 55 days. Which seller had the better representation?