Buyer’s Market - Seller's Market - Multiple Offers - Limited Inventory. If you are buying or selling property you’ve probably heard these terms and wondered what they all mean and how they might affect the pricing of a home. Or, does the price put on a property even matter? The fact is, the asking price is possibly the most important factor in determining how fast your home sells.
We know that you want to make sure that you price your home high enough to make a profit, as well as leaving negotiating room. But, you should consider also that, even in a hot seller's market (like we were in last year), overpricing your home is probably the most dangerous mistake that you can make as a seller. Besides the asking price, there are many things that can affect how quickly you sell your home (i.e. how you market your home), but for now, let’s just consider the price.
It really doesn’t matter if the market is a buyer’s market or a seller’s market, the fact is if the home is priced fairly and your home is in a condition that appeals to the average buyer, you should be able to sell your home if you are able to market it to enough potential buyers. However, partly due to the hot seller's market we experienced in 2005, we are seeing more and more examples of overpriced homes, and as a result, homes that do not sell. A home may be overpriced for many reasons. Some sellers consider their first asking price to be a trial period, where they just want to see if they can attract a better-than-normal offer. Others simply insist that their home is worth more than any objective market analysis would indicate. For example, sellers who have been trying to sell their home themselves for months may now want to raise the price since they are considering hiring a Realtor for representation and will be paying a commission. The sellers still want their net price, so they try to add the sales commissions to the listed price. Homes like this usually stay on the market the longest and end up being sold for less than market value.
There is considerable data available showing that homes listed with a real estate agent sell for far more than those not listed with an agent – more than enough to cover the commissions paid.Many sellers know of a home that sold for a high price in their neighborhood. They naturally assume that their home should be similarly priced. But, they may be unfamiliar with the particular differences between that house and their own that would justify the difference in value. One of the primary reasons so many for-sale-by-owners fail is because the seller is personally biased. It is just too easy for people to convince themselves that something they own is worth more than its real value. It’s very hard to put yourself in the buyer’s shoes when assessing your own property. That’s just human nature.
It is important to know that there are buyers in every price range in your market just waiting for the next property listing. They've already seen everything that fits their criteria without finding the right home. If you are trying to sell your home, chances are you’ve been shopping for a new home yourself. Think about how your attitude is when looking at it from your perspective as a buyer. If your home is priced right and it fits, you could have a quick sale. However, if it is overpriced, the buyer may not even see your home at all or won't make an offer. And with interest rates on the rise, timing is critical in finding the right buyer. By overpricing your home, you may exclude buyers who qualify for your home now. When you get around to reducing your price to where it should be, interest rates may have risen, thus bumping that buyer to a lower price range.
Overpricing can cause you to lose that buyer forever. Even if you are able to find a buyer willing to pay your price, it still must appraise… but that’s a topic for another time.More Info at www.BestHomesInJacksonville.com
ABOUT THE BLOG OWNER
TIMOTHY H. FENNELL, PA
Tim Fennell is a Florida licensed Real Estate Broker with Legends Land and Realty, Inc. in Jacksonville, Florida.
His strong background in business development, real estate investments, counseling and marketing greatly enhance his skills as a Listing and Internet Marketing Specialist.
Tim and his wife, Susan, have over 30 years experience in Jacksonville Real Estate sales, marketing and investing. Both are Accredited Consultants in Real Estate (ACRE®). When you're ready to be consulted with, rather than sold to, give Tim and Susan Fennell a call.
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