When you place your house on the market, you want to sell it as soon and for the best price possible; that is usually the goal. However, too many sellers are currently setting unrealistic expectations.
They don't recognize the market has moved as inventory has increased. What are the side effects? Price cutbacks are increasing, but they don't have to be. Here is why.
According to Realtor.com statistics, price drops were at their highest in February since 2019 (see graph below):
When you consider that 2019 was the final genuine normal year for the housing market, that is a major issue. We're coming back to normal market conditions.
This isn't the same frantic seller's market we witnessed a few years ago. You may not obtain the same price as your neighbor did during the peak of the outbreak. That means you may need to adjust your expectations.
Because this is the reality. If you set your pricing too high and have to drop it later, you may wind up receiving lower bids than if you priced it correctly from the start. So, how can you avoid this? You rely on your agent.
How an Agent Can Help You Set the Right Price
A great agent does not simply generate a number out of thin air. They will use genuine data and market trends to ensure that your home is priced appropriately for its current market value. So you're setting a reasonable price that will attract serious purchasers.
And, based on your agent's knowledge of your local market, they may even suggest deliberately price your home slightly below market value to help it attract more attention and more competitive offers. Here's how your agent will find the appropriate number for your home:
They review recent sales: How much did similar properties in your region actually sell for? Not for listing, but for selling.
They investigate local market trends: The worth of your house is determined by what purchasers in your area are prepared to pay, not just what you want for it.
They develop the appropriate plan: They will ensure that your home is priced to draw attention and generate a sense of urgency among potential buyers.
Why Overpricing Backfires
Unfortunately, some sellers continue to disregard their agent's advise, preferring to start high and see what occurs. The hope is that they will receive their full asking price, or at least have more wiggle room for bargaining. However, premium pricing usually comes at a cost. Here's why:
Buyers might not even look at it: Today's shoppers are more cost-conscious than ever. If they see a home that appears to be pricey, they are more inclined to walk away rather than negotiate.
It could remain on the market for too long: The longer your home remains unsold, the more purchasers will suspect something is wrong with it. This may make future sales more difficult.
You can end up receiving less: Homes that require a price reduction frequently sell for less than they would have if they had been priced correctly from the beginning.
The graph below shows how things shake out. It employs data from the National Association of Realtors (NAR) to demonstrate that the longer a house sits, the less it will sell for:
This graph indicates that if a house sells within the first four weeks after listing, it usually sells for full price. According to past experience, this is what happens to homes priced at or slightly below current market value. If it's priced correctly, buyers will be intrigued and, eventually, willing to pay the asking price - or compete with other purchasers and go above asking.
However, if a house isn't priced correctly, it won't sell quickly. This graph indicates that after the first four weeks on the market, the price begins to fall from there. That's because buyer interest dwindles the longer it sits. As a result, a seller is more likely to accept a lower offer because that is all they have, or to cut the price to entice buyers back in.
Bottom Line
The last thing you want is to list too high, have your house sit, and then have to lower the price to attract attention.
Want to ensure that your house sells quickly and at the greatest price?, contact Arkansas Real Estate Collective today to discuss your choices!
