A Seller Market? Maybe, Maybe NOT.
The current housing market generally favors sellers, but that doesn’t mean that all homes sell right away.
There can be a host of reasons why a home doesn’t sell quickly.
Dropping the price may sound like a great way to get a home sold more quickly, BUT BEFORE making a decision to lower the price, it’s always good to do your homework and understand that there are many things that affect the time it takes to get a home sold – and price is just ONE of them.
Here are some things to consider:
- Comps / Past Sales
We’ve all heard the old real estate saying “location, location, location.” That can work more than one way. Where a home is located has a huge effect on how saleable it is.
Desirability is in the mind of the potential buyer.
- Homes in some older neighborhoods may sell more slowly than some new ones.
- Great homes in so-so locations – like near train tracks or major freeways – may also take longer to sell.
- Some neighborhoods are hot and trendy so even marginal homes sell quickly because that’s where people want to live.
It’s always a good idea to do your homework so you won’t be surprised or disappointed when it takes longer to sell a home than you want.
The first question is:
How long did it take similar homes in the neighborhood to sell?
It’s a fact; homes in some areas may just take longer to sell. If you know that going in, you can set the right expectations. It’s important to have a realistic understanding of the time it takes based on location.
Homes in one area may only take 6 days to sell but ones in another may take 6 weeks.
- List price
Managing price changes is always a relevant topic and requires proper perspective to make sure you get it right.
The supply of buyers thins out as the price goes up. Most of the time, higher priced homes take longer to sell because fewer buyers meet income requirements and may also have home sale contingencies.
Back to comps again, sellers need to factor in the average price points for their area and consider what range they want to be in and how that fits their desired time-to-sell thinking.
- Uniqueness of the property
Some homes are very unique. They may have a style of construction or lot that will appeal to only a limited number of people.
- Some distinctive architectural features like arts and crafts style may turn on one group and leave a much larger population unimpressed.
- New builds with “turnkey/move-in-new” condition may appeal to one family while another wants “charm.”
- A heavily wooded or near-a-ravine lot might be a lot more attractive as opposed to a home that has no yard and lots of concrete.
- Sellers need to factor in how common their home is in the marketplace as it will factor into the amount of time it takes to sell it. A price change will help, but not always solve this problem.
- Easy to finance
If a buyer will have a hard time getting a loan on your property due to physical condition, location or other factors, you are going to have a much harder time finding a buyer.
Again, it’s a really good idea to see what comparable homes are selling for – AND how fast they are moving.
Price adjustments might make a difference, but you need to review all the factors above. Consider all of them before making any price adjustments – sometimes it might be better to just be prepared to “wait it out.”