When a home hits the market for the first time, often times the sellers are mis-informed of its value or they choose to ignore the pricing guidance from their listing agent. Either way, the only solution is to either wait for the market to catch up or to reduce the price within the range of its fair market value.
As somebody looking to buy a home in Tallahassee, you should monitor price reductions every day (assuming you are ready to "pull the trigger" and buy a home today). Why?
Home seller price reductions are often a sign of changing motivations, when sellers move from the realm of "Fantasy Land" to the actual market place of "Reality." Unfortunately for these home sellers, this price-reduction strategy will likely lead them to a sale at a price lower than had they hit the market with the correct initial asking price.
And this means opportunity for you.
Now before we go on, you have to understand that not all seller asking-price changes are downward moves. Sometimes, home sellers raise their asking price. Ninety five times out of a hundred, the reason is due to the supreme ignorance of their listing agent who is merely trying to maintain a relationship with the seller long enough to hopefully get paid.
Any of these adjustments have the potential to add value.
For the remaining 95 sellers in a 100 who are convinced to raise their price, they are not ready to sell, just leave them alone. Think about it like this ... nobody fancied their home at $300,000, so they raise their price to $315,000??? How well do you think that works out? Do you think the home compares more favorably to the competition at a higher price or a lower price?
Just because a homeowner lowers his asking price does not now make the home a good value. It merely shows the potential for a more-motivated home seller. Regardless of market conditions, only motivated home sellers get their homes sold.
Lowering a home's asking price might not change its market-ability at all. If a $300,000 home is on the market for $360,000 and the seller reduces it to $350,000, NOTHING has happened. It's still an over-priced listing with an unmotivated seller.
Unfortunately for home sellers, buyers are not stupid. They look at all the homes in their price range, and select among the best values to see offline. Pricing correctly is the key to attracting enough buyers to create value.
Understanding value and pricing are just part of the equation in how your real estate company is going to save you money (yes, I said company, not agent). If you are selling, you need a team that works exclusively to market and sell homes for top dollar. If you are buying, you need a team that works around the clock to ensure you get the right home, at the right price, without paying a bunch of outrageous third-party fees.
Whether buying or selling, we would like the opportunity to interview for the job of being your real estate company. I promise you will be better informed and more likely to be successful after we talk, even if you choose to hire another company.
To get the ball rolling, you can CONTACT US HERE to let us know when you would like to meet.
Recently a homebuyer asked me if you could still find a foreclosure in Tallahassee for forty cents on the dollar, so I decided to look. Here are 46 foreclosures in Tallahassee, and yes, one of them has indeed been reduced in price by 60%.READ MORE