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The single biggest misconception that we see in the real estate industry – particularly when it comes to sellers deciding on a price for their home is that they compare their home to any other product you might find on the market. The truth is that rather than a simple product you might find on the shelves at a store or even a vehicle in a dealership – the cost of a home is largely dependent on external variable factors.
The single biggest misconception that we see in the real estate industry – particularly when it comes to sellers deciding on a price for their home is that they compare their home to any other product you might find on the market. The truth is that rather than a simple product you might find on the shelves at a store or even a vehicle in a dealership – the cost of a home is largely dependent on external variable factors.
In other
words, real estate is a commodity just like stocks. And it fluctuates based on things
like the level of consumer confidence, our economic outlook, the global
financial picture and of course unemployment rates. This is also why homeowners
are often confused as to why they may have paid a completely different (and
much lower as is the case often these days) amount for their home as compared
to what they are advised they ought to sell for.
Consider
the past five years. Prior to the market crash in 2007, we were experiencing a
real estate boom. Houses were selling like hotcakes, consumer confidence was at
its best, lenders were quick to dole out loans and homes were (in hindsight)
overvalued.
Fast-forward
to the aftermath of the housing market crisis and you will see the snapshot of
what took place and quickly notice how those conditions affected our
marketplace. Homeowners were stuck with homes not worth as much as they owed on
them and there were suddenly millions of Americans facing situations of
distress with their properties.
All the
changes in the market had a significant impact on what people would be willing
to pay for the purchase of a new home. That is why we strongly advise our
sellers to recognize what goes into pricing a home and to realize that the secret
to selling successfully lies in pricing a home accurately.
The most important thing you
can do as a seller is to price your property right. Unless you want the home to
sit on the market while you endure countless showings, keeping the home in
tip-top condition and maintaining its “seller façade” until it finally generates
some interest – set your pricing benchmark realistically to begin with.
In our
video we have highlighted three properties that were on the market for too many
days to count. These were properties listed with our competitors and they were
not selling. The one common denominator they all had was that each one was
priced way off mark. The results are telling when you look at just how quickly
we were able to sell these properties once they were listed with us.
The
bottom line? They were priced wrong. To avoid that from happening altogether,
we institute several steps to prepare our clients. Of course our goal is to get
you top dollar for your property but we do it in a way that works according to
the market – something that is an absolute must with any commodity.
We’ll
cover the second piece that goes into successfully selling a home (marketing
and exposure) on another blog.
If you
have any questions about how we go about our process or what your home may be
worth – contact us today. We’d be glad to help!
