You keep hearing that the real estate market is slow, and sure enough, the houses for sale in your community just seem to be sitting. But you still need to sell your house and you can’t wait around forever. So what do you do?
While there are many factors to consider if you need to sell your home right way, the asking price of your property is probably one of the most important.
Some background information is needed at this point. In a balanced real estate market where the supply of homes is relatively equivalent to the demand for homes, the sales price of a property is usually determined by evaluating the sales price of similar homes in the same community (known as comparables or “comps” method). In this method, a seller would typically price their home at, or slightly above, the price of similar homes that recently sold in the same community. However, in a slowing market, the supply of homes exceeds the demand, which produces a situation where buyers have many choices.
The “comps” approach is a useful method in a balanced market or in a market that favors sellers, but is less useful in a market that favors buyers. The reason for this is that in a buyer’s market (where supply exceeds demand), homebuyers have many choice and sellers must compete to attract their attention.
In a market that favors buyers, prices tend to drop as sellers under bid one another to get their house sold. If you need to sell your property and can’t wait, then ask your Real Estate agent to re-evaluate the asking price of your home and to make a recommendation about changing the asking price below your competitors. In this type of market, homebuyers demand a bargain and the price is a top consideration.
Although price is a top consideration, there are many other things you can do to improve the probability of selling your house in a slow market. If your house is just sitting and you’re not getting visitors or offers, ask your Realtor to come up with a list of ideas that will improve your chances. Encourage them to be through and creative in their proposed solutions.
You should also keep in mind that the real estate market can be very different from one community to the next, even between communities that are just a few miles apart. Even in a slow market, some communities will continue to demand a premium price, while price reductions will be evident in a neighboring community. Your Real Estate Agent can provide you information about which communities are “hot” or “cold” in your region of the country, which will help you price your home to sell quickly.
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