How To Determine The Difficulty In Selling A Home
Back in "the good 'ol days" before the housing market boom and the subsequent bust, an appointment with a homeowner for the job of selling a home was very predictable.
We would look at recent home sales, determine a value range, and then advise the seller on the critical initial asking price.
While the seller would typically "feel" their home was worth more than the market analysis would indicate, the emotional "overage" was highly predictable.
But that has not been the case for the past five years. Now, I think homeowners want to know more about the process of determining the value of a home, and for those in the upper price ranges, they want to know just how hard it will be to find a buyer.
Measure Liquidity When Selling Your House
I would not trust the market value determination from anybody who did not present me with current information about supply and demand, and how the market for a specific home was trending.
The following three charts show fairly detailed real estate supply and demand information for Tallahassee, and it is very useful when determining the difficulty in getting a specific home to sell (they are derived from the one-page report on the right).
This first chart shows the current inventory of homes for sale in Tallahassee. By way of example, somebody with a $650,000 house to sell in Northeast Tallahassee would see 40 homes in the same price range in the same area, and 54 available in all of Leon County right now.
Now that we know "the competition," we want to know the current rate of demand. We find that by looking at the number of sales over the past year.
Staying with the example of a $650,000 home seller, we can see that 49 homes sold in this price range in NE Tallahassee over the past year, and 60 in all of the Tallahassee real estate market. Another way to look at it is this:
Every month there are 4 to 5 buyers in the price range for a $650,000 home. So roughly 10 percent of the homes in the same competitive price range are going to sell each month, thus a home seller should ensure they are among the top 10% in value if they want a buyer to choose them.
Now contrast that with a $180,000 home seller, where 30 will sell in the NE each month from an inventory of 149. They would need to be among the top 20% to likely attract a buyer.
Uneven Levels Of Competition When Selling A Home
The moral of the story is that things are not even among all home sellers. General articles in the newspaper that depict a recovering housing market do not adequately address the real market for each and every homeowner. Some are approaching a seller's market, while most are dealing with a market approaching equilibrium, yet others are still squarely in the midst of a buyer's market.
If you want to get top dollar for your home, you have to know exactly what it is worth so that your marketing efforts and your negotiating efforts are sound. Make a mistake in either one, and you will likely leave some money on the table.
If I can help you in any way as you prepare for selling a home, please drop me a note and we will respond in a fast and professional manner.