By Mike Bodeen · 27 June 2016
Marketing Time Makes a Difference
“We can always come down,” says the confident seller. This is a true statement, but there can sometimes be unintended consequences that can have a serious impact to the overall goal of selling a home for the best price and terms in a timely manner.
“How long has this been on the market?” asks the interested buyer. In my personal and professional experience, the buyer usually wants to hear one of two responses. Either long or short. If long, the buyer’s thinking “low ball offer.” If short, the buyer’s thinking, “I better see this soon.”
What we know for sure:
1. More buyers will see the listing in the first 2-3 weeks of its commencement compared to any other time during the listed period.
2. If there are going to be multiple offers on a home, they usually occur in the first few days of the listing, or the first week after a good price reduction.
3. The longer that a listing is on the market, the greater the distance between the selling price and listed price.
The Phoenix Metro real estate market is currently one of the most well balanced markets in the country, which has not always been the case. (See the Cromford Report chart below) You’ll note that July of 2005 which was the peak of our blistering seller’s market, the average time it took a listing to go into escrow was 24 days. Contrast that with the ugly market downturn in February of 2008, where the average market time for a home to sell shot up to 140 days.
Today, the average market time is 78 days. Bear in mind that days on the market very much depends on what price range you’re in. If you’re priced under $200,000, your home will (should) sell quickly depending upon location. If over $500,000 the length of market time increases the higher in price you get.
If you’re a seller and you want to “test the market” with a higher listed price than professionally indicated, is there a way you can do so and not get burned? Well, no one can say for sure, because it’s a gamble, but one method we’ve used that has worked periodically, is to list a home with an automatic pre-agreed price reduction in 3 weeks (or thereabouts) down to the professional’s opinion.
In the technologically advanced (i.e., internet) age we live in, the world of interested home buyers has seen your home online and has opted to either act on it or not. If they like what they see, they will want to see it. If not they will either file in the digital circular file, or perhaps save it to keep an eye on it. If the home is reduced they will then note this and may decide to look at the home at a later date or refile it until it gets to a price that will induce them to act.
The best course of action for the seller is to get the home under contract during the first 3-4 weeks. He will (usually) not get low-balled and obtain best price and able to move on to the next goal.
Market data referenced in this article comes from The Cromford Report.