If you want to get top dollar for your property, you better watch your market time. A lower amount of market time typically results in a higher to list price offer.
The Importance Of The First Few Weeks On Market
You will receive the most amount of traffic and showings for your house in the first two weeks your home is listed. It’s very likely your highest offer will come within the first 30 days. The first few weeks of market time is crucial because that’s when everyone takes notice of the new listing on the block.
Buyers and real estate agents closely scour the market for homes that have price changes or brand new to the market. When your home comes on the market, it becomes the “new” listing and serious buyers will quickly schedule an appointment for viewing “before it’s gone”.
This gives sellers the upper hand in negotiations for possible offers. Buyers and Realtors know that newly listed properties get a lot of showings and price is not as negotiable.
Why Buyers Will Pay Closer To List Price With Shorter Market Time
I never quote the average time to sell a house. Selling a house is all about perception and positioning. When something new comes on the market, everyone will flock to it since it is the “new, hot” property. It’s the perception that “someone else may buy it” that has potential buyers creating their own sense of urgency on making an offer.
People will pay more for something today that they fear may be taken away from them tomorrow.
The thought of your dream home being SOLD to someone else is not worth the $5,000-$10,000 of negotiation. The monthly payment will not be affected much by a small increase in purchase price and buyers will pay more for something they have been waiting for.
They will certainly pay more for something they feel they have competition on as well. If you want to sell a home fast, my best advice is to price aggressively up front vs. starting out with a number that you know is very unrealistic.
If you are not receiving much activity or showings the first few weeks on the market, you are most likely priced too high. If that happens, my best advice is to price change immediately. The real estate market will always tell you what it’s doing based on showing activity.
Why Market Time Is A Bad Thing
One of the first questions buyers ask is about the market time. They want to know how long it’s been listed. If it’s been listed for a while, they are more likely to think it’s overpriced.
Buyers justify their offers by recent closed sales and the current inventory. They begin to second guess the purchase price of a home that has been on the market for a while. They want to know why nobody else has scooped in and purchased it if it was such a “good deal”.
Market Time CASE STUDY
Let’s take this example! There are two houses for sale on the market. Let’s assume the houses are identical. One house has been on the market for 98 days and the other house was newly listed. Assuming you would buy either house, do you think you have more negotiation room on the newly listed home or the home that has been on the market for over three months?
When a property sits on the market it creates a stigma amongst buyers that something must be wrong with it. Buyers will do their homework before making an offer on a property and higher market time creates an invitation to come in with a lower offer.
The seller who just listed their home is not as likely to have as much negotiation room since they are still in the “I’m testing the market” mode. The seller who has been on the market for 98 days is starting to get a little anxiety of the sale of their property. They are starting to think about reducing their asking price and tend to be more open to look at all offers.
When I am working with a buyer client and I see longer market time, I am more likely to advise my client to start off much lower than a property that is newly listed. I know the newly listed properties have more activity and showings. I also know that the property sitting for 98 days has not moved and that their showings are dropping off. Some of the best deals are had right when the seller is thinking about a price change. If I am working with a buyer that’s exactly where I want to catch them at.
My best advice is to start as high as reasonably possible, but be ready to make make a change if you are not getting the activity. Every property is different, but it is very important to have a pre-planed pricing strategy up front.
As long as you have a good online marketing plan working for you, your home will sell if it’s priced right. You will know if you are priced right when you are getting 5+ showings per week. If you go over 15-20 showings at your list price without an offer, it is probably time for a price change unless to want to sit it out and wait for someone to low ball you.
We cannot create the market, we can only adjust to what it tells us. The market will always tell you what it’s doing if you listen to it.
Have Any Questions?
When I meet with a potential seller client I make I walk them through the entire house selling process up front. This will help you decide if selling your home is right for you at this time. If you would like to to set up a time to see how if selling your property is right for you, just fill out the form below or contact me and I will be glad to assess your situation. Don’t worry I don’t bite and there is no charge to have a conversation :).
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