The Price Must be Right
Bean Group
AUGUST 2010
"Location, location, location," was historically the real estate mantra. Today it's, "Price it right to get it sold!"
The National Association of Realtors (NAR) reported on July 1st that The Pending Home Sales Index, a forward-looking indicator based on pending sales of existing homes, dropped 30.0 percent based on contracts signed in May from a reading of 110.9 in April. The data reflects contracts and not closings. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
"Existing-home sales that close in June will remain elevated, but we'll then see a notable decline for July and August," predicted NAR's chief economist Lawrence Yun.
Home sellers take heart. There are several factors that you can control to get your property sold. Ensure that your property is in good condition and implement an effective marketing and sales strategy. The most important component of that strategy is effectively pricing your property.
Pricing a home appropriately at the start of the listing process can save a home seller a lot of time, hassle, and most importantly, money.
At any given moment, there are buyers that are actively in the market. These buyers are generally preapproved for a mortgage, know market values, and are prepared to make a purchase decision. For this reason, the first 14 days usually has the highest showing activity and are the most critical in capturing the largest number of buyers, and selling the home for the highest price possible.
If a property is priced aggressively, it will attract this important buyer pool's attention. More buyers interested in the property, means a higher probability of an offer and the possibility of multiple competing offers. Even with current market conditions, there are numerous instances of Bean Group sales associates generating multiple offers, and bidding wars because a property in good condition was priced right.
If a property is improperly positioned in the marketplace from a pricing perspective, then this pool of buyers will overlook the property. This can be a serious mistake for a home seller. If a property is on the market an exceptionally long time, new buyers will wonder why the property hasn't sold, stigmatizing the home. Additionally, the owner must pay the carrying cost for a longer period of time while chasing the market downward.
To maximize your selling price, it is crucial to analyze both traditional in-person property showings as well as property visits from buyers viewing your home online. Strong activity and Web traffic are good indicators that the property is priced right. Lack of activity may indicate the need for a price adjustment.
Your real estate agent will monitor current market conditions, including new competing properties on the market, recently sold homes, and those overpriced homes that failed to sell. The attached graph will also give you an overview of these current market conditions as well. To learn more about pricing strategies, please contact me today.
