While most experts agree that pricing a home properly at the onset is the best strategy, setting an accurate price can be a challenge for even the most seasoned real estate agent and homeowners. Price is affected by a myriad of complex factors including a constantly changing marketplace. Couple this with a reluctance to set the price too low and the tendency to build in “negotiating room” and you can see how overpricing is a common occurrence in every market. How do you determine that the price is the factor limiting the sale and what do you do when the market does not agree with the price?
It is common knowledge that listings receive the most showing activity in the first two weeks. While some time is required to expose the home properly to the market, generally after a couple of days and during the first week we witness the highest amount of interest and showings on a new listing. This second week generally tapers off and the third week will receive showings from buyers who perhaps were not available to view the home earlier. Following this initial flurry of activity we often experience a steady, but slower pace of showings for the next several months. From the buyers perspective they have most often viewed everything available on the market and succumb to watching new listings as they arrive on the MLS® system. This accounts for the flurry of activity in the first week as these buyers scurry to be the first to view the new product, hoping that it will be the home they have been waiting for. After this group of “pent- up buyers” digests your home, the remaining showings occur from buyers who were slower to respond and those “new buyers” who naturally arrive to the scene and are viewing all the available existing product.
The interesting fact is that the first group of buyers are your best experts. They have seen all the existing product on the market and compared the attributes of each home along with the price in your particular niche. This is why it is essential to any marketing plan to receive feedback from this field of Buyers to determine if there was anything that could be improved in the home to make it more palatable to them or the market. While our marketing plan includes a pre-staging service to determine improvements that will make the home more salable, sometimes there remain items which could be improved. Often times we will discover that an oversight or some other tweak that was not apparent can make a difference in the saleability. After a thorough review of any items that can be improved in the home and a period of time which ensures that the property has been adequately exposed to all current available Buyers, it is time to review the price. This process should highlight any items within our control that should be changed to improve marketability before we look to price as the primary factor. This review should occur between two and three weeks on market.
What affect does reducing the price have on the marketability? First it signals renewed interest from the first group who came through and the portion of them who did not show interest due to price being too high. Secondly it exposes your property to a new group of Buyers who previously did not view it because it fell outside of their price bracket in their auto-search. Third, it provides some “news” and another reason for your real estate agent to promote your property either through renewed advertising or networking. This entire process is sometimes repeated several times depending on how aggressive the Seller wished to be regarding price and their urgency to sell.
While the best strategy is to set the price accurately at the outset, you can see that with proper monitoring and an attentive real estate agent, there are good processes in place to correct an over-priced listing that will get you back on track. Sano Stante Real Estate provides a marketing plan that includes feedback and monitoring, along with expert advice to help you through the most critical stages of selling your home