Home pricing is the most important aspect of home sales, in any real
estate market. Any property will sell, regardless of the market, if
it's priced with that surrounding market.
A common
misconception is to price a home high when first listed and then reduce
later. If a home is priced right, a home will get more showings, as you
can see in the graphic below. More showings indicate the market feels
the home is listed properly, and there's a feeling that a deal can be
put together. In fact, if a home is priced right where it should be, the
offer could come fast and even produce multiple offers, driving the
price up!
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As
you may be aware, we are currently experiencing a buyer's market,
although it is not quite the buyer's market it was over the past several
years. Low interest rates are creating higher buyer demand, and we are
also seeing fewer homes for sale. Depending on the location, that mix
of higher demand and shorter supply is showing an improvement in sales
prices.
Still, we are in a buyer's market, and in a buyer's
market a home needs to be priced better than the competition and in
equal or better condition. As you can see from the graphic below, the
homes that are not well priced or not in the best condition aren't
selling.
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Recent
sales data in Northeast Ohio shows that out of every 100 homes listed
for sale, 46 fail to sell. This is actually an improvement over the
fourth quarter last year.
Even with this improvement, of the 54
that did sell in the fourth quarter, 33 of the homes (60% of the homes
that sold) required at least one price reduction. That tells us that 79
out of every 100 homes are priced incorrectly at the time it is listed.
To
further dispel the the notion that pricing high at the beginning of the
listing won't effect the sale or the price of the home, the graphic
below shows the difference in homes that didn't require reductions
versus homes that did. Homes priced correctly sold in 34 days for 96%
of asking price, while the homes that required reductions sold in 191
days for 80% of asking price.
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Again,
the key to selling real estate is proper pricing. Related to that, is
hiring an agent that has a solid marketing plan and can provide you with
the proper research you need to make an informed decision on pricing.
That way, you're not wasting valuable time and money and wondering why
your home is still on the market.
I invite you to contact me anytime to discuss further.
