This is a great time to sell with limited inventory on the current sales market and the mortgage rates at all-time lows. In fact, every news outlet is saying how the housing crisis is in remission, so why hasn’t your home sold yet?
Let me give you a frame of reference: if you have had a property on the market for longer than 2 months with no serious interest, your property can be considered stale and will be harder to sell. Keep in mind this is not true for all properties. Certain properties that fit into a niche market (multi-million dollar mansions, horse farms, etc.) or have problems (in areas with lots of construction, awkward layouts, etc.) will take longer to sell than turn-key properties. If your property doesn’t need improvements and is in a sought after location, why didn’t your house sell when it first came on the sales market?
Our society is becoming increasingly visual and tech-savy and people want to see high-quality photographs. Do your listings feature plenty of pictures of the property? Are the pictures high-quality and shot by a professional photographer? Is your listing mobile friendly so buyers look up your listing on their smartphone or tablet? If you answered “yes” to these, then more than likely it’s because the price is too high.
There are many reasons a property doesn’t sell but more often than not, not pricing a house to sell in the current market is the factor for a listing to go stale. If you feel this is wrong, let me ask you, did you come up with a price based on the formula: I paid X so many years ago and put in Y so the price should at least be (X+Y)+Z with Z for inflation and appreciation? It’s an easy formula but it is the wrong way to go about pricing a home. One reason is that your ROI is never equal to 100%. There are several home renovation projects to increase its value, but none of them will give you back exactly what you put in. Another reason this formula is inaccurate is that the market works much differently and a property should be priced to sell for the current market. Worst case scenario is that your area took a hit in the housing crisis and it hasn’t recovered. If you bought it for X at the peak of the market, chances are you are not going to get it all back when you want to sell. Best case scenario, you bought low and held onto the property for years and now you can get much more than what you paid and put in.
“Is my property priced too high?”
If you and your Realtor are doing everything to market your property well, check the sales activity in the local market. Is there a lot of activity? If there is a lot of activity in your sales market but your property has not had any interest, this is a good indication the price is too high. Pricing a home is not a guessing game, have your Realtor provide a comparative market analysis and look at the data. This will show you what similar properties to yours have recently sold for and you will also be able to see how long they were on the market and compare the list price to the sold price.
If you are still saying to yourself that you know your home is worth the price you are asking, let me ask you this: do you really want to sell your home? If your answer is “only if I get the price I want,” you don’t really want to sell and chances are you won’t sell. If your answer is “yes,” then it needs to be priced to sell in the current market. If you want to get the best price, price the home to sell to begin with. This will bring a lot of traffic and interest right away, which is the most critical time for any house on the market. The properties that are getting close to asking or above asking are priced well at the start. If the property is priced too high to begin with, it will sit. To generate renewed interested, you will need to drop the price. Depending on how long you have it on the market and how many price reductions you make, you may end up selling for less than you would have if you had priced it well to begin with. In the meantime you have lost money because of the holding costs incurred through property taxes, maintenance, and mortgage payment.
If this doesn’t move you to reconsider your strategy when pricing a house, see what your asking price gets you in the local market. Are there more bedrooms? New renovations? Landscaped outdoor space? These are what buyers are expecting at this price and if your property falls below their standard, buyers are not going to be interested.