I'm sure you have heard these words of wisdom, price it right and implement a great marketing plan and you will successfully sell your home.
While this is true, there are a lot of complexities and nuances that go into determining the correct price, the correct pricing strategy and the correct marketing plan. Like most ventures, preparation and execution are the keys to success.
Understanding the fundamentals of the Lake Norman Real Estate Market will assist you during the preparation process and help you avoid the costly mistakes that sellers unfortunately repeat time and time again.
We have taken these fundamentals and organized them into 4 categories of Home Selling Insights:
- 1) 0-30 Days: Why are they the most important days of a listing?
- 2) The Agent: What's the agent's primary role?
- 3) Home Value: The factors determining your home's value.
- 4) The Price: Choosing the right pricing strategy for your home
1) 0-30 Days: Why are they the most important days of a listing?
When a home first goes on the market there is a pool of buyers ready to go under contract. These buyers consist of people who have either not found the 'right' home, missed out on another home or now feel confident enough to the pull the trigger because they have been out actively searching. These buyers generate the highest amount of activity on your listing.
One common approach among sellers is to 'Test the Market' at a higher price than the data suggest. The downside of this approach is that the seller has an overpriced home during the highest period of activity.
The buyers in the first 30 days will also make the best offers because this is when the competition for your home is the highest and you as the seller have the most leverage. Therefore, it's advantageous to position your home to attract offers in the first 30 days.
The longer a home is on the market, the number of sellers who reduce their listing price increases as well as the number of sellers who have to increase their incentives to the buyers. The incentives may come in the form of closing costs or credit towards remodeling or repairs.
Additionally, "time on the market and the ratio of sales price to listing price are highly correlated; generally, the longer a home is on the market the greater the discount from the listing price upon sale" as stated by the National Association of Realtors in the 2015 Profile of Home Buyers & Sellers.
After 30 days, these factors create a compounding effect that negatively impact the final sale price and most importantly the net proceeds. Many sellers understandably enter the market with the following mindset:
"We can always lower our price"
This is true but the risks lie in the fact that the longer a home is on the market the more likely there will be price reductions. Time on the market and price reductions reduce the buyer's confidence in the home. Buyer's confidence is critical in obatining the best sale's price and is why one of the first questions a buyer ask is: "How long has it been on the market?"
As a result a home that should have sold at market value sells below market value.
When it All Comes Together
During the first 30 days, the activity and more importantly the competition is at the highest. These factors converge creating an environment for the seller to accept an offer when the seller has the most leverage in the process. As time passes these advantages wane and eventually become negatives that work in the favor of the buyer.
Correctly pricing your home to sell in 30 days not only allows you to capitalize on the advantages already discussed, it also produces other benefits as well.
A faster sale means less inconvenience for you to keep your home 'show' ready and to make your home available for showings. Additionally, properly pricing your home will leverage the marketing efforts resulting in increased internet response and agent response.
The Bottom Line
You can't get the first 30 days back. Don't rush just to 'get it on the market'. Make sure your home's condition, price and marketing plan are dialed in before you enter the market.