Learn the Importance of Limiting Market Time
Every seller naturally wants to get the most money for their home, but did you know that sticking a high price tag on your house is not the way to do it? If you’re looking for the best way to get top dollar on your property, I’m going to show you exactly how to do it! By limiting your time on the market, you’ll have the best chance to get the most cash—and the reasons why are simpler than you may think.
Why The First Few Weeks Are Critical
You’re going to get the most traffic and activity on your property within the first few weeks it’s listed on the market. Qualified buyers and real estate have been waiting on the sidelines, constantly refreshing for the newest deals. Once your listing goes live, these potential buyers are going to want to pounce on a fresh prospect and start scheduling showings immediately.
Think about your listing as the “new kid on the block.” When you’ve seen the same properties week after week, the emergence of a fresh property is going to create some buzz. This urgency will move buyers to schedule a showing, ensuring they have a chance to get their bid in before your home has sold to someone else. Use this flurry of activity to your advantage. Since your highest offers are likely to occur within the first 30 days of listing your home, you’ll have the upper hand in negotiations.
A Shorter Market Time = Higher Offers
Have you ever wanted something more after it was gone? The fear of missing an opportunity often compels us into action, and real estate plays by the same rule. When a new property comes on the market, buyers will feel obligated to pay full or price—or more—out of concern that someone else will buy their potential new home first. It’s essential that you, as a seller, use this natural urgency to your advantage.
Most people would rather avoid haggling over $5-10k during negotiations if there’s a chance they’ll miss out on their dream house. They’re more likely to put in an offer to beat any perceived competition if they realize their monthly payment won’t change much if they were to negotiate. Again, people will pay more for something they really want if they think there’s even a slight chance they could lose out on it.
Pricing your home aggressively upfront will help you sell faster than starting out with an unrealistically high number. Doing so will result in a higher chance of getting the best offer before you accumulate too much market time. If the amount of showings and activity on your property in the first 2 weeks is slim, you’ve probably priced too high. Do a price change immediately and trust the market. It will tell you when to make a move based on the number of showings you’re receiving.
Why It’s Vital To Avoid Too Much Market Time
The longer your house sits on the market, the more buyers will assume they have room for negotiation. And they’re not wrong: after 30 days, you’re going to need to negotiate to avoid accumulating even more time on the market. From their viewpoint, if the house was such a good deal, it would have already sold. Once they view it as overpriced, they’ll be likely to start sending you lowball offers to try and snag a deal.
FOR EXAMPLE: Imagine two identical houses listed for sale on the market. The first has been listed for 6 months, and the other was listed this past weekend and already has 20 showings under its belt. Which one do you think you’d have more room to negotiate on? Naturally, you’d have a better chance of negotiating with a seller that hasn’t sold their house yet after such a long time and will be open to offers.
This example clearly illustrates why market time so important. A stigma develops on a property that has been sitting unsold for too long. Buyers will conclude that something must be wrong with the house if it has yet to sell. These same buyers are also invested in their home search, and you should trust that they’ll be doing their homework on potential properties. They’ll be aware of how much market time your home has accumulated. If you price your house too high in the beginning and take too much time to “test the market,” you may end up making less money in the end.
Let’s take a look at the numbers to drive the point home. We know that the first 2 weeks will be your best chance of selling your home for your asking price. After 45 days on the market, you’ll statistically only receive 96% of your asking price. If your home stays on the market for more than 90 days, that average drops to 94% of asking price. While that may not seem like too huge of a loss, consider that 4-6% less on a home listed for $400,000 drops your earnings between $16-24,000. That money could have been in your pocket had you sold your home sooner.
The point is clear: more time on the market means less money for you.
Take My Advice
Now that you’re aware of how market time affects your home’s sale price, my advice is to price your property according to what the market is telling you. Realtors, sellers, and buyers do not create the market—they can only adjust to it. Set your start price as reasonably high as you can, but be prepared to make a change quickly if you’re not getting enough traction. It’s important to have a preplanned pricing strategy in place before you list your home.
Having a good marketing plan set up will also increase your chances of reducing your market time. You’ll know if your home is priced right if you’re getting 5 or more showings a week. If you’re getting 15-20 showings at your list price without an offer, then it’s probably time for a price change—unless you want to wait it out for the lowball offers to start rolling in.
If you need any additional help in determining what your 30-day sale price should be, please don’t hesitate to reach out to us for a free evaluation of your home’s value!