What is the shelf life of your listing?
The market is absolutely crazy right now—homes are selling for prices that shock even me, inventory is lower than I’ve ever seen it, and interest rates are still historically low, making affordability higher. And, due to the influx of 50 million+ millennial buyers in the market, we simply have too many buyers and not enough homes to meet demand. These conditions have caused many to be concerned that we’re in a housing bubble. In truth, it’s not a bubble but rather simple economics.
As the market improves, we’re starting to see more optimistic sellers. If they don’t get the price they wanted right off the bat, they’ll drop the price in a few weeks and attempt to get it again. In reality, we’re seeing the exact opposite happening.
The market is scorching hot, so if a great home goes live and is priced correctly, that listing will generate a bidding war which will, in turn, help it sell for a record price. That said, if you overprice your property and it doesn’t sell within two or three weeks, buyers will stop caring about the listing. Unless you do a dramatic price drop, you’re not going to get the activity you want.
If your listing isn’t getting any showings, then that means you’re probably 7% to 10% overpriced or more. If you’re getting a lot of showing activity but you’re not getting any offers, you’re probably 3% to 5% overpriced.
The biggest problems we see with sellers who overprice their homes are twofold:
1. They don’t drop their prices enough. For example, if you’re 3% to 5% overpriced and you only drop the price by 1% or 2%, that might not be enough to get anyone’s attention.
2. They don’t drop their prices soon enough. Usually when we list a new property, we have a two-week window where we’re pushing to sell the property for the best price. By week two, if we don’t have any prospects, then we’ll have a conversation with the seller to drop the price by 3% to 5% to keep the buyers interested in it.
The bottom line is that this market may be hot, but buyers aren’t stupid. If you overprice your property too much, you’re flirting with the possibility of your listing going stale.
On our team, we’re experts at marketing homes and getting them ready to sell for the best price in two weeks or fewer. If you’re interested in learning more about how our team operates, reach out to us. We’d love the opportunity to share our strategies with you.