Tucker and I are in the studio this week and he wants to ask you a question, are you wondering why your home hasn’t sold yet? Tucker says,
Check your price!
The residential housing market has been hot and demand has remained strong throughout the spring.
We are a week into summer and if your house has been on the market for more than 30 days and you don’t have an offer yet, my suggestion is it's time to ADJUST The PRICE.
Buyers are out there, it's a hot market in Chicago and it’s only June. If there is such a thing...this is real estate season.
I’m sure you’ve heard about buyers getting into a bidding war?
this happens because the seller priced with the ‘worry price’.
The worry price is when the buyer sees the house and is worried they can’t get back to their agent's office fast enough to write the offer.
And if your price is right, maybe one of the lucky ones and up getting over asking price.
So how can you tell if your house is at the right price?
The market will tell you.
One way to know is If you’ve been on the market for 3 weeks and haven’t received an offer.
Pricing your home above market value dramatically cuts the number of prospects.
Buyers that come to your house and don’t make an offer are basically buyers rejecting One of three things the location, the condition or most often your price.
Homes generally get a lot of traffic when they're first listed.
And that’s when you have the best chance of getting an offer.
So, has it been a few weeks?
Are your showings tapering off?
Are the dates between showings starting to spread out?
Here’s what’s happening, your homes energy factor is softening.
From experience, typically after 20 days, you’re no longer the ‘new kid on the block’.
So, here is what you will want to do:
You and your realtor should figure out which is the most recent CLOSED closest comp.
Use THIS house’s price as your baseline.
In a strong market, your price should be NO MORE than 5% higher than what that house sold for!
In a soft market, your price should be exactly what that comp sold for.
THAT’S HOW PRICING WORKS
Because if it's too much higher, the buyers will reject it.
So testing it 6% or 8% more than the most recent comp will mean longer market time and possibly a lower sales price.
See the consumer has the ability to get into your house virtually with all the access to the internet. They're already evaluating it before they even come.
Another gauge of price is feedback.
After a showing your realtor calls with the feedback, what are they saying?
If you’ve been told the price is too high 3 or more times--- The market is taking you should pay attention!
I like to use the grocery store line as an example.
Don’t you hate it when you get in the checkout line and the person in the next line gets to the front and then checks out and you’re still in line?
If your price is high, buyers will find something else for that same price with more features and you get pushed back in the proverbial grocery store line.
not kidding folks. You only have one chance to list your house for the first time. To be the debutant at the ball.
You want to have your best dress on, and be ready for the dance!
Does that make sense?
The price sellers usually arrive at will be a factor of motivation.
If you're motivated or ‘need’ to sell, you'll want to list in the lower range.
And if you do this, you’ll have a greater chance of multiple offers too.
A bidding war often drives the price up.
I get people saying to me “I don’t want to give it away”.
There is no such thing.
If you price it right at its value, you’re creating urgency and demand.
The property will inevitably trade at its fair market value either way.
From my experience, listing too high often creates longer market time and it if gets stale it might eventually trade at a lower price than if you priced it competitively right out of the gates.
Think of your house like a commodity, like a stock.
If your house was IBM, and IBM is trading at $100 a share, would a buyer go to another broker and pay $150?
No, because the fair market value is $100.
That’s how the housing market is.
In closing: if you don't have an offer in the first month or 30 days, be prepared to look at the price. It's not only growing season, its housing season...At the end of the day folks, it’s all about price. call me if you have any questions. Shout out to clients listening. It's great to honor and privilege to be a part of such an important process in your lives. And I want to thank you. And to all the listeners, if you know anyone looking to buy or sell a home, let me help you, and support you through the process.