| What is a seller's market? |
| |
Less than 6 months supply of standing inventory is considered a
seller's market.
Standing inventory is computed by dividing the number of homes available
by the rate of sales during the past 12 months.
In a seller's market the number of buyers is large in proportion
to the number of homes for sale.
The demand for homes is greater than the supply.
Buyers must compete with each other for the available inventory.
There may be multiple offers received shortly after a property goes
on the market.
Buyers will submit the highest possible price and terms that they
feel the market will support.
Prices will trend upward.
In a climbing market, pricing slightly above recent sales is appropriate.
|
| What is a buyer's market? |
| |
In a buyer's market the number
of buyers is small in proportion to the number of homes for sale.
This situation can be created by high interest rates,employment decline
and excessive building.
A low number of buyers equals a lower price.
Sellers must compete with each other for available buyers.
Prices trend downward.
In a falling market, prices should be set at the lower end of the
range, because time works against you.
This may be difficult to do, especially if your home was purchased
at a higher price. |
| Should you price "high," and hope for an offer? |
| |
Houses should not be priced
over the market. This is not the best way to position your home.
You will inadvertently help to sell the competition.
Your high price will convince buyers that another home is a good value.
Your “time on the market” is evident to buyers, and is a
subtle but important factor in their decisions.
Your best leverage occurs during the early marketing period.
Your home is being shown to the wrong group of buyers,from whom you
need an aggressive negotiator - someone who will make a low offer. |
| How will you know if the price is correct? |
| |
The best affirmation of correct
pricing is "second looks" from buyers.
This indicates that your home appeals to buyers in your price range.
There may be a few "nibbles" before a buyer comes forward
who is ready to act. |
| How will you know if the price is incorrect? |
| |
You have steady showings, but
lukewarm responses.
There are buyers, but they have other choices with more competitive
prices.
You have very few showings. The buyer pool is small.
This will require very competitive pricing and a longer marketing
time.
A small buyer pool is a "buyer's market" and requires more
aggressive pricing. |
| How long should you market a home at a given |
| |
About 8-10 showings is a reasonable
number for feedback regarding the price.
This usually corresponds to about 2 -6 weeks, depending on the market.
In situations where there is a very small buyer pool, 8 showings may
take longer.
Your urgency and time frame must the taken into account in testing
the market. |
| What happens if your home does not sell in a reasonable
time? |
| |
If your home has been on the
market for months with no offers, you have been given a clear message
that the price is set too high.
This is particularly true if showings have slowed down and there are
few prospects coming to see it.
What you do at that point depends on whether you really need to sell.
If you're not really motivated to move soon, you can always wait for
the market to catch up with the price you want.
It would be best to take your home off the market and wait for better
conditions.
Buyers become suspicious of a house that's been for sale for a long
time.
If you need to sell, we should discuss a schedule for dropping your
price until we reach a level that attracts buyers.
There's no reason to say, "We simply can't sell our house."
Houses will sell if the price is right. |
| How can you get top dollar for your home? |
| |
Although buyers will not pay
more than market value, they will pay a premium for homes that are
in excellent condition and well presented.
With good condition and presentation, you can reach the high end of
the price range achievable for your house.
We will work with you to “create value” before your house
goes on the market. |
