How Long Will It Take To Sell Your Home
How long will it take to sell your home? Apart from the obvious factors (e.g.,
homes in very high price ranges have fewer buyers than $300,000 homes), a word
about economic reality is in order. We have all been taught over the years that the
"real
equation" in real estate is "location, location, location." This is utterly
false. People do actually live in Kansas and Alaska!
The real equation
in real estate is price vs. condition, for all areas no matter where you're at.
If your home is marketed effectively, (i.e., at least 6 or 7
showings, and it's in the best possible showing condition) you should
get a favorable response in 6 to 8 weeks. By "favorable" I mean second showings,
requests for additional information, or an actual offer.
Unfortunately,
most homeowners have been brainwashed into thinking that to get the price they
want, they must list their property for 5-10% above it's actual market value,
but in all actuality they are hurting
their chances of getting what their home is really worth.
Think about it for a
second. Most buyers are actually using an agent to find that "perfect property".
Any agent doing business, for any amount of time, has a very accurate knowledge
of home values for each particular area and community, within their market. What is the first step in
that Buyer getting to your home for exposure? Their agent looking through the
MLS and finding your property in the search results, is the first step. Most
agents, when they see a home that is 5-10% overpriced or more, alongside 7 or 8
others with comparable features, won't even set up the showing.
After
weeks and weeks, with no bites or offers on your property, you have to make a
price reduction to get it back to it's true market value. Now, because the home
was overpriced to begin with, this price change will seem pretty drastic to any
agent looking through the MLS, for their clients. At this point, the only offers
you will probably receive are going to be lower than your new reduced price.
It's all about mindset. The Buyer sees a drastic price reduction, several weeks
or months on the market, and they think, "They NEED to sell. They'll take less."
To effectively market your property, you must have an accurate Comparative
Market Analysis done for the area, and it must be given enough time on the
market to bring the correct price. If your home sells in 5 - 10 days, it's
usually selling too cheap. There IS a buyer for every home, even in these tough
economic times. You just have to
give it adequate time for the market to bring the two together.
If you
have not received a favorable response to your showings, there is only one part
of the equation that can be changed: your price must be lowered. You can either
face this fact now, or deal with it much later, after months of being on the
market. Run a second Comparative Market Analysis because, yes, the market in ALL
areas does, and will, change.
And one more key point to remember when
deciding your homes value and marketing. Tax Value or Assessed Value means
nothing! This is just a value the tax department assesses on your property to
determine how much you'll pay them in taxes. It's almost always too high. The
tax department works off of old numbers and doesn’t take into account any
changes in condition or interior of the property when making adjustments over
the years. And some tax departments only evaluate properties and
real estate every 6-8 years! Can you imagine trying to sell a home at it's tax
value from 2002? I don't think so.
Also, If you've had your home refinanced, 8 times out of 10, it's too high.
Why? Because appraisers for a refinance are not held accountable, while
appraisers at initial purchase are. That's why you may hear some stories about
the appraisal "not coming in" before close of an initial purchase transaction.
Refinance appraisers work for the lender. Don't let a refinance appraisal
influence your calculation of actual market value of your home. Base it on sold
comps of truly comparable properties
within your section of your local market.
So what
does all this teach us? Price it right the first time. Allow enough market time
to get true market value for your home. You'll save yourself alot of time and
frustration.
The following chart is a national market average.
2006 Sold within: % of Homes
2009
Sold within: % of Homes
1 Month 40%
1 Month
10%
2 Months 7%
2
Months 18%
3 Months 7%
3 Months 11%
4 Months 20%
4
Months 10%
5 Months 10%
5 Months 12%
6 Months 7%
6 Months 15%
7 Months 9%
7-8 Months 24%
If you want to be proactive and your property isn't sold within 60 days
after 5 or 6 decent showings to qualified buyers, a price adjustment should be
made! Especially in this slow market. When you have 1-2 years worth of inventory
or more sitting on the market, in any given area, you have to be proactive. Take
another look at the comps and the competition and price it accordingly. Wedge
the price right in between recent sold comps and Active competition.
Statistics are based on National average of homes sold.
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