In hot markets commonsense sometimes flies out the window. We saw that when buyers, small investors and lenders made mistakes they shouldn’t have during the 2004-2005 boom period.
Now we are starting to see examples on the seller side where commonsense it lacking.
Why Don’t You Just Throw a Dart!
Sellers will sometimes get caught up in the excitement of a strong seller’s market like our current one and forget that even in a seller’s market you have to price a home based on facts and statistics. Unfortunately, sometimes seller agents also get caught up in this and have their own temporary loss of commonsense.
I’m seeing this more and more – homes that are on the market month after month after month during a period of time when most homes go under contract within 1-2 weeks of being listed with multiple competing offers coming in almost immediately. It is also interesting that even with a shortage of properties to buy, the average number of days on the market in many areas is higher this year than it was last year. Though the inventory is lower (which should result in a lower average days on market), average prices have gone up and this seems to be what is causing an increase in the overall average time it takes to sell.
It requires even more judgment and skill to properly price a home in a market like this than in a normal, balanced market.
Pricing in this market not only has to take into account the comparable sales and what the property would be worth based on that information, but it also has to take into account the potential value related to it being a type of property in an area that has a high demand with little or no supply, if it fits that description. At the same time you want to price to get the maximum amount for the sale you also want to be sure not to push the price too high and risk being the house that ‘isn’t selling so must have something wrong with it’.
A good agent will help in evaluating all the information necessary to determine the price range that is appropriate for your property and that will best achieve the goal of sold at the best sale price in the optimal amount of time.
Selling your home isn’t a given even in this current market. This isn’t game show – you and your agent shouldn’t behave like a game show contestant and game show host.
Pricing your home is one of the key factors in how much it ultimately sells for and how long it takes to sell and so it should be done right the first time.
(FYI – if you don’t recognize the name Bob Barker, he was well known for hosting a game show called the Price is Right during its first run on TV.)