Given the current market conditions, sellers would do well to be grounded in some sobering facts. Many sellers are still attempting to price homes at 2005 levels; trying to cash in on unrealistic expectations and profits. This speculative attitude has resulted in an oversupply of homes in the Buckhead and Sandy Springs markets.
Fact: Currently these markets report an average of a 33 month supply of available homes – far above the norm of a 10 to 12 month supply. The excess inventory has led to a strong buyer’s market. What that means to sellers ‘today’ is that effectively pricing against the competition is more important than ever.
Problem: For the motivated seller in today’s market, it is customary to price their home against recently sold comparable properties. This approach, however, may lead to later disappointment, as only the best one out of every thirty-three properties on the market will sell in any given month. If your property is not perceived as the best available (price vs. condition) relative to the competing properties at the time, it will be overlooked, thus accruing days on the market. I have always said there are only three reasons a house sells; marketing, condition and price. Marketing is designed to increase awareness among potential buyers and the Realtor® community. Once the buyer arrives at your door, it is the combination of price versus the condition of your home – relative to the competing properties – that influence a buying decision. If buyers do not perceive your home to be a value for the condition, they’ll buy elsewhere. In real estate, time is not your friend. Properties that aren’t selling are perceived as “market-worn”; begging for low offers. This explains why new listings receive the most attention by agents and buyers alike, and if the price-to-condition balance is in sync, will sell very quickly.
Solution: Be honest and objective. How? Ask your Realtor® to physically show you the competition you are up against. Keep in mind, having the most amenities doesn’t always translate into getting the highest price. Use those amenities to stand out from the competition rather than pricing yourself out of consideration. Remember, you must be perceived as exceptional to sell in today’s market.
Offer more for less. Be the exceptional property. This is not simply a function of price, but also condition. Prospective buyers will heavily discount homes for perceived needed upgrades or improvements. For example, if carpets are worn, sellers often offer a carpet allowance in lieu of replacing it themselves. While the seller may view this as a benefit, buyers may perceive the home as a “fixer-upper” and discount the price in excess of the cost of the carpet. By contrast, homes that are clean, clutter-free and well-maintained stand out from the crowd. A good Realtor® knows how to maximize your homes’ potential through proper home staging. Now more than ever, you don’t get a second chance to make a winning first impression.
Obviously, no seller wants to leave money on the table. The point here is that ironically, testing the market through overpricing can actually create a loss through increased time on the market and deeper price cuts to attract attention. Through very careful positioning, today’s motivated seller can still achieve a timely sale with these strategic solutions in mind.
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