asking themselves one question: why isn’t my home selling?
While each client’s situation is unique, and we all think our homes are special, there is one underlying factor that makes or breaks a buyer’s decision to settle on your home: PRICE.
Pricing your home correctly in this market is one of the most critical actions you can take to sell your home faster – it's also one of the most difficult decisions you’ll have to make as a seller. Which is why so many people won’t do it. What sellers have to realize is that by making the decision to price correctly from the beginning they may be staving off further financial damage. For some, that means getting creative about finances, for others, it can sometimes translate to taking a small loss. In some cases, taking a small loss may be the best scenario.
Let’s look at it another way.
- John Seller paid $300,000 on his home that is now worth $250,000. Many REALTORS® would tell him to come down on his price at the beginning by say, $20,000.
- Now his asking price is $280,000.
- Scenario (1):
A buyer comes along after one month on the market. They know, based on the CMA, that Mr. Seller’s house is worth $250,000, so they put in an offer for $245,000. Mr. Seller decides to counter with $255,000, and SOLD! Now Mr. Seller can move on knowing that he is lucky not to have lost any more on his home.
- Now Scenario (2):
Mr. Seller actually decides not to come down on his price at all. As a result his home sits on the market for the first month with only a few bites from buyers but no official offers. An experienced REALTOR® would recommend that Mr. Seller come down 10 percent each month that his home doesn’t sell. He does it. Two months later Mr. Seller’s home is now at $243,000. Finally, in the third month, a buyer comes along and offers $237,000. At this point Mr. Seller is considering, but feels it’s too low, so his home sits another month. Frustrated, Mr. Seller decides not to come down on his price anymore. At this point Mr. Seller is in trouble. He is underwater on his mortgage and every additional dollar he loses on the home sale must come out of his pocket to pay off the loan. By starting at a higher value than the market will support, he stands to lose more than if he had factored in a small loss up front.
source: Wise Agent