Price positioning a house to sell is one of the key factors in the marketing plan a listing agent will prepare. Price positioning the house to obtain the highest price possible in the market is the differentiating factor between many real estate agencies. Following is an explanation of the differing components of marketing a home to sell for maximum net return for the seller.
The buyers who are ready to buy now are generally working with an agent. They have an agent who is keeping them apprised of any new homes coming on the market in their price range and area. They are rarely just using the Boston Globe, or local newspaper, to identify homes for sale. When a home comes on the market that is of interest to their buyer the agent contacts their buyers and arranges to get them into the home as fast as possible. Within 3 weeks of a home being on the market most active buyers who are ready to buy now have been to view the home. If the home is priced well it will generate excitement within the buying community and an offer should be forthcoming. At this point in time, the tangibles offered to the seller to sell their home have not really come into play yet - the sign in the yard, the newspaper advertisements, the Open houses, 'Just Listed' announcements etc are useful but if the home is priced higher than market value then they will be of little benefit. What is important is the excitement and enthusiasm of agents in the area if the home is priced well, and the immediate calls they make to their buyers letting them know about the new house that has just come on the market.
When a buyer is excited about a house In the first week of it being on the market they wander through the house wondering 'What will it take to buy this house?'. When you get more than one buyer thinking this then the price the house will sell for goes up.
When the house has been on the market for around 2 weeks the buyer wonders 'What is this house worth?'. They view the house and go home to analyze what the house is worth - they aren't inspired to immediately make an offer but want to think about it and discuss the pro's and con's of the property. When this happens the potential for the house to obtain the maximum possible purchase price goes down.
When the house has been on the market for 3 weeks or more the only buyers who haven't seen it are the buyers who are just entering the market. They are looking at houses to educate themselves - what is on the market, what you can buy for the money and the differing locations in the area they are interested in. These buyers are not ready to buy now but will be ready to buy in 90-120 days.
Generally, we say that when a house has been on the market for 3 weeks at a certain price point and has not had an offer made and accepted on it then the market is talking and saying it is overpriced. It is not priced well enough to stimulate agents to immediately call their clients about the great house just newly on the market, nor is it stimulating the general buyer pool into making an offer.
Another tool we use to evaluate the market positioning of the home and whether the house has been priced well for sale is the amount of second showings.
When a house has no buyers wanting to view it then we know that it is priced too high. When we have a house that has many first showings but no second showings then we know that the house is priced to generate enquiries but not priced well enough for the buyers to come back and see it again because they are not seeing value in the home. When we have a house that has many second showings then we know that the house is priced well - buyers are seeing value in the home and want to come back and check it out again.
So, each day the listing agent should evaluate and document the showing activity a home has had to assist in identifying if the home is priced well enough to attract offers.
The longer a home is on the market (known as Days on Market) the less 'desirable' this home appears to a knowledgeable buyer. It becomes a case of "It's been on the market for 110 days and nobody else wants it, so what's wrong with it?" in the buyers mind.
Proper market positioning is key to selling a house. Listing your house for $750,000 when it's market value is in the $500,000+ range will not achieve you a sale. No amount of advertising, or open houses, or broker's opens, signs, or any other type of marketing will sell a house for over its market value - the only thing that may do this is by competing offers being made by buyers - the way to generate this is to list your house at a price that will generate energy and enthusiasm in the buyer community and will potentially place you in the situation of having to choose between multiple offers on your home.
If you would like an estimate of what your home would sell for in today's market I would be more than happy to come by, have a look at your home, and then provide a CMA (comparative market analysis) which will provide you with an estimate of what your home should sell for, along with a marketing plan to get maximum exposure for your home.
If you'd like to chat more about the topic presented here, or the Real Estate market in general, then please call me on (617) 997 9145, or email me at Dani.Fleming@MAPropertiesOnline.com.