The market is booming, and it is a sellers’ market for sure…and all the talk at dinner parties…
“My cousin got $50,000 over asking AND they’re waiving the appraisal!”
“They were on the market 7 hours and had 3 offers!”
“I can’t believe they got that for THAT!”
It’s true…with inventory so limited, just having a home to sell is valuable. But, I am still seeing some basic mistakes that are costing sellers money.
It really is ALL ABOUT PRICING:
I think we can all recognize that homes are selling at a premium right now. Location still is the number one driving force. The more desirable neighborhoods are seeing the biggest price tag increases. A huge price increase does not apply to every home. I have seen some properties sit and need to do a price reduction or two. If you are doing a price reduction in this market something is WAY OFF. Starting too high and sitting through valuable market time is a WASTE OF MONEY. The longer the property sits…the lower the potential offer, and the carrying costs accrue for the seller. I’ll give an example:
As your trusted real estate agent, I do a market analysis of your home and find that your property is worth $500,000.
- Scenario 1: Client lists at $550,000 wanting to see how far they can push the market.
- Scenario 2: Client lists at $500,000 wanting fair market value for their home.
In Scenario 1 the property is more likely to make less money than scenario 2. Let me explain. Analytical information is telling me that your house is worth $500,000. We know this is fair in a NORMAL MARKET. In a seller’s market this number can be pushed…but why push it yourself? Why not allow the market to tell you how much you can get? Buyers know…they know what market value is, AND they know how much they are willing to spend. They know homes normally go for $500K, but this scenario 1 dude is already pushing the limit, and frankly, showing he’s unreasonable. Before the buyer crosses the threshold, they already have a sense of disdain. Now they are looking for problems. Now they are looking for reasons not to buy because it’s already overpriced. Don’t get me wrong, scenario 1 will still get you showings, but you have limited yourself to those only looking in the $550K range, and there could be some primo $525-540’s out there not looking at your property because they know they can’t compete at that price. If scenario 1 doesn’t get an immediate offer, they are way too high and will sit through price reductions until they get to that magic number that gets them a deal…paying for it all the way.
Scenario number 2 has done the exact opposite. They have created excitement. “Finally! A house in the exact area we were looking at honey! And it’s not that expensive…in fact we have WIGGLE ROOM to potentially offer more!” Buyers know…they know this is a good (well, fair 😊) deal and they jump at it. This scenario is most likely to bring the most people in to view your home. This scenario got the largest market exposure to get the absolute best offer. This scenario will get multiple showings and potentially multiple offers, naturally driving up the price tag. The seller gets over asking, and the buyer is delighted to do so.
We are in a seller’s market, but it is not the seller who tells the buyer what is fair. It is the buyer that tells the seller what they are willing to spend. It’s easy to sell in a seller’s market, but you could still lose out if you don’t understand the market, and how to use the market to serve you. If you are interested in listing, call me and I would be happy to give you a fair market value of your home.
Julia Ziller, Broker Miscella Real Estate
For those who want to sell their home in Aurora, Geneva, Batavia, St. Charles, Wheaton, Naperville, IL, get in touch with the real estate experts at Miscella Real Estate. Their agents will guide you through every step of the selling process from pricing to closing. Call them today at (630) 232-1570 or email info(at)miscella(dotted)com.