Wednesday, August 5, 2015 / by Katherine Kiernan
Selling in a Seller’s Market: Price Still Matters
As listing agents we love getting the highest dollar possible for our clients and we are willing to work very hard to do so. However, it doesn’t matter how hard we work if the numbers just don’t add up.
So what’s in a number?
Sellers often come to us and state that they have a specific number in mind that they want for their house and state they wouldn’t be willing to take one penny less. Oftentimes these sellers use phrases like, “Bob and Sue next door sold their house for $xxx and our house is WAY nicer than theirs so we should be able to get much more than that” or “I looked at my Zillow Zestimate and it says that my house should sell for $xxx.” Sound familiar?
Here is what Bob and Sue’s sale price and your Zillow Zestimate don’t tell you… The price that you will get for your property has a lot more pieces to it than what your neighbor’s house sold for. For instance, when we run your comparables to assist you with coming up with an asking price we account for style (rambler, two-story, bi-level, etc.), square footage, number of bedrooms and bathrooms, remaining specials balance, lot size, garage stalls, location, etc. That is going to give us a market analysis based off of numbers and features alone. However, this is nothing more than a mathematical analysis giving a generalized idea of what properties with those same features are selling for. The piece that you don’t get in those numbers is the piece that we as real estate professionals have to account for and give value to. This is the educated estimation of your home’s location, curb appeal, uniqueness of design, desirability overall, and functional appeal. There is no mathematical analysis that truly exists for these pieces aside from what we are seeing properties like your home netting.
From the http://www.zillow.com website Zillow states this about the Zestimate: “The Zestimate is created by an automated software process, designed by statisticians, and there is no ability for humans to manually alter the Zestimate for a specific property.” Just as in any computer system or program, the number is only as accurate as the information submitted to obtain a desired value. “Our accuracy depends on the home data we receive; see our Data Coverage and Zestimate Accuracy table to see how accurate we are in your area. When it comes to unique homes (e.g., luxury mansions, unusual designs) we are less accurate in our Zestimates.” (information courtesy ofhttp://www.zillow.com)
Priced too high or too low? The market will tell you!
Sometimes as sellers one becomes so consumed with what they think their house is valued at that they go against all reports, “Zestimates”, professional advice, etc in order to net that top dollar value. When this occurs sellers demand listing at higher values and going more aggressively at the market. In some cases the gamble pays off… In most, however, that simply isn’t the case. Statistics show that the better and more accurately you are priced, the more likely you are to see an offer within your first 10 days. Another perk to being priced accordingly? MULTIPLE OFFERS!! In multiple offer scenarios many sellers find themselves in that very fortunate place of receiving not only their asking price but oftentimes higher than that with few concessions required!
Here’s what to look for to characterize the symptoms of incorrect market price:
- You’re seeing 3 or less showings per week
- You are seeing your house sit for weeks on end with no offers
- Despite extensive marketing efforts by your agent such as open houses, ads, personal calls to their database of clients to inform other buyers of your house availability, follow-up on any and all showings and social media blasts you continue to experience disinterest in your home
- Multiple small price reductions still don’t see the efforts of the above-mentioned numbers 1-3 paying off
Your house is listed, it still hasn’t sold… Now what…??
When you are seeing inactivity on your home and you are still motivated to sell the very best thing you can do is go back to your agent and review the basics. In this scenario the very first thing we do with our clients is to review the numbers. We run a fresh set of comparables to review with our clients to examine the price. In the event that the numbers are perfectly aligned with our asking price we then need to do an environmental evaluation. Has there been a dramatic impact on the market for any reason specifically such as weather, holidays, school starting, a natural disaster, etc? If the answer is yes to any of the above, examine ways to proactively re-market your property that pays respect to the aforementioned items. If the answer is no, it is time to get serious about your property. Emotionally remove yourself from the property and ask yourself, “If I were the buyer coming into this property what would my big turn-offs be?” Those are exceptionally tough realizations for sellers to come to. Oftentimes we are dealing with clients who have had significant life events happen in the home or have other sentimental ties to the property for other reasons. We get it. Your home is your castle, but if your house is on the market it means it is there for a reason. As such you need to evaluate the very best and most proactive way to address any property deficiencies to earn your desired outcome. Statistics prove, houses that accumulate days on market very rarely see an offer at their current asking price and more often than not the offer that comes in is far from desirable.
When selling your home, don’t get lost in the pricing mind maze. Seek out the very best, educated, statistically accurate information and heed the advice of a licensed listing agent. You won’t be disappointed with the outcome!
Katherine and Sarah
Kiernan/DeJean Property Associates
Element Realty, Inc
4610 Amber Valley Pkwy | STE E | Fargo