Why Is Right Pricing So Important?

What is “right pricing” and why is it so important?

For me, “right pricing” is the research and analysis that goes into identifying a price range and a pricing strategy.

The end result is a specific price that will prompt offers. Too low and the house may sell quickly but at lower price resulting in a lower net at closing. Too high and the house may never sell without one of more price adjustments and then, like the too-low scenario, may generate less cash at closing.

My experience tells me that the right price must be within certain limits to attract offers, and those limits vary with the value of the property and amount of time it has been exposed to the market.

The penalty for overpricing is huge, both in days on market and net at closing, and not to mention the additional emotional stress and the negative impact it can have on many areas of life. No one expects to become the one to catch what I refer to as Seller Fatigue but it will materialize over time, and it can take as little as 30 days.

I dig into the details to be in a position to give my clients real numbers generated from my area of focus (i.e., the higher value resale Walton High School homes in just four elementary schools: East Side, Mount Bethel, Sope Creek and Timber Ridge). This effort is necessary because the MLS search and reporting capabilities don’t provide this micro market detail (which is so important for those in Walton) nor does the firm Keller Williams Realty hires to produce custom stats.

It is also important to understand that the MLS reporting does not always (in fact, most of the time) illustrate the real challenge facing sellers. My SDOM (Seller Days On Market) captures the full number of days the property has been exposed to the market which can be significantly different from the TDOM (Total Days On Market) reported by the MLS due to their restrictive guidelines.

Another must-know, but not reported, is the number of days that transpire from the last price change to when a listing goes under contract and ends with a sale. It is important to have this information as a guide when considering the timing of price changes.

In general, as house value increases, so does the amount of time it takes go under contract (aka, Binding Date). Also interesting is that the data reveals that listings go under contract in less time when the house was first listed for sale with the right price (i.e., price changes were not involved) compared to the elapsed time from the last price change to the Binding Date for those listings incurring price changes.

Price Change Impact 10-31-18 All Price Ranges

Picking the right price is simple, but not easy. The benefits are clearly in favor of getting the price right, right out of the gate! One can be lucky and guess the right price, or improve the odds by hiring a Realtor with hyperlocal market concentration and expertise…Brady Miller, 678-933-7780.

 

 

When Is The Best Time To Sell?

This question is probably second only to, “How’s the market?”

I find most people are looking for a month or season. The typical response is usually not an answer but information that may already be known; i.e., higher prices in the peak season (spring/summer) mean more homes on the market, while lower prices in the off season (late summer/winter) are associated with less inventory and seemingly fewer buyers.

My reply is a 2-part answer and perhaps unexpected.

First, when to sell should be when you are ready, regardless of the time of year. Is there a life event driving the move? Do you have time to prepare the house? Is the social calendar full?

Second, when to sell should be within the first 2 to 3 weeks of putting the house on the market. It is rare for a house to look as pristine months later. Buyers intuitively know there is more room to negotiate months later. Owners develop what I refer to as “Seller’s Fatigue” which can lead to poor decisions.

Take a look at this chart showing the resale average sales price of single family detached Walton High School homes in East Side, Mount Bethel, Sope Creek and Timber Ridge. It identifies the two months for the past 10 years with the highest average sales prices. Two observations:

  • The customary seasonal low-price months (cool blue) offered some of the highest prices in 2008 – 2015.
  • Recent years have been consistent with the pattern usually expected; i.e., highest prices in the spring and early summer (hot red).

Walton Highest Months Avg Sale Price 2008 - 2018

Maybe the housing recession and early recovery had a role to play in this unexpected results and things are now more “normal” in this post-recovery period.

I can provide plenty of evidence to demonstrate the importance / benefits of being under contract sooner than later. And the number of sellers that do, without resorting to price reductions, may be surprising. Avoiding what I term as a “False Start” has a lot to do with starting at the right price.

Contact me when you have thoughts of selling, regardless of the time of year.

 

At The Mercy Of The Market

“At The Mercy Of The Market” was mentioned briefly in our July 1st post, Sellers – Fight In Your Own Weight Class.

In it we identified the “market” as simply the competition. But what or who is the competition? In our terms, it is anybody or anything that can get in the way of a sale! Any of these can present obstacles to closing. Continue reading “At The Mercy Of The Market”