If you have a home for sale and you've been on the market for a while, you might be wondering what is going on. While I have written numerous articles on what you should do if your home is not selling, but I wanted to share a recent conversation I had with a buyer that might give you some insight as to what is happening "on the other side."
Many of the homes that are on the market are overpriced. These are home sellers that are uninformed as to the current market situation and have priced their homes based upon what they need, rather than what the market will bear. Homebuyers are typically not even finding these homes, as they do not appear when one does a proper home search based upon the best values in the market. But when they do find them, they often have questions for their real estate agent.
I always advise buyers not to even look at over-priced houses, because only 2 things can happen.
- You won't like the home, because at its asking price, it is not nearly as nice as its competition.
- You will like the home, but you will have to pay a price that is far above what it is worth, and the home would not even appraise should you get it under contract.
In either case, you end up with a disappointed home buyer, because both outcomes produce an unsatisfactory result. Just the other day, I had the following dialogue with an out of town buyer who is ready to make a purchase. This "ready home buyer" has produced a list of the features and amenities she wants in a home, and was asking me about a particular home that looked perfect for her family.
Conversation With A Homebuyer
Home Buyer: Why is the home priced so high?
Me: The seller "needs" to pay off the loan that they have on the home. They purchased the home fairly recently and are not prepared to sell it at a price that is comparable to the other homes like it.
Home Buyer: So do I make a super-low offer and see if they counter at a price more in line with what it is worth?
Me: No. Most homes in Tallahassee are selling at 97% of the asking price (meaning only properly priced homes are selling). This seller is not ready to sell yet and we should remove it from your list.
Home Buyer: But I really think I will like the house.
Me: That's too bad. Do you want to pay $60K more than it will appraise? You'll have to bring that extra money to closing.
Home Buyer: No, I don't have an extra $60K. I guess we just won't go see it.
Home Sellers Need To Make A Tough Decision
As you can see from this conversation, this home seller is not going to get their home shown to a buyer who is ready to make a purchase. Good buyers are few and far between these days, so home sellers need to do everything they can to get these buyers to their homes. Pricing the home is the first key step in this process, as homebuyers will use price to determine what homes make the grade.
The homes that we have been featuring in with our Progressive Internet Marketing Plan have been getting sold, on average, in 8 days. They are priced correctly to current market conditions, and they are being marketed utilizing the best resources that the internet offers for getting a home exposed to ready buyers. It is not enough to be "on the internet," or even on to be on hundreds of websites, a home needs to utilize a targeted marketing plan.
If you have a home on the market, and you if you have recently had one on the market and you need to sell your home, check out our overview of a targeted home marketing plan and learn what it takes to sell a home in today's highly competitive market. You should seek a right price analysis on your home, by a real estate agent who really understands current real estate market conditions. If you use the right price with a targeted marketing plan, you will sell your home.
Joe Manausa, MBA is a 27 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.