One of the biggest challenges any agent faces in today’s market environment is advising their seller client on the “right” list price for their home. No one wants to sell their home for less than it’s worth, and we take that responsibility very seriously. Here are some things we have learned over the years:
The first two weeks a home is on the market are the most important, because that’s when it gets the most activity. Viewings on the Internet and actual physical showings are almost always greater during this period of time than any other. If a home doesn’t get the attention of buyers right up front, it becomes much more difficult to get them back. Think of a retail analogy: the newest fashions are put on the aisle where there’s the most traffic and buyers are excited. But stuff that doesn’t sell tends to get pushed to the back of the rack, frequently with a markdown in price, to make way for new merchandise. And sellers of real estate should know that there is always new “merchandise” coming on the market to compete with them.
The ultimate sales price, compared to original list price, diminishes over time. We know this to be true, because we’ve seen it in every kind of market condition. Consider this chart from homes that settled in May 2010 and 2011 in Northern Virginia. Those that received contracts during the first week on the market sold, on average, for almost list price, while those that took four months or longer to sell got roughly 88% of original list price.
So, finding an initial list price that won’t scare away buyers is critically important. And the data show that sellers cannot just wait for the right buyer to come along to give them the price they’re looking for. It is an incredibly competitive market, and in most price ranges buyers have lots of choices. And because of those abundant choices, they won’t overpay for a property. They don’t have to, because something else this is priced right will come along. These days, it’s all about a seller offering their home to the market at a compelling price.