UPDATE 10/2017: This is an older blog post written at the time prices were just starting to decline. The main idea of this still holds true in any market. I've included an updated video.
In reading other blogs and news items I am "hearing" other agents state that price is the most important thing to get a property sold in today's ever-declining Buyer's Market. And I agree.
Price always was king, even in the booming Seller's Market we experienced. There were still properties during that time that did not sell until they reduced price. There were still some long market times with properties that the sellers thought they could ask whatever they wanted and someone would make an offer. Houses were selling all over, and sometimes it took multiple agents to get sellers to understand that they were grossly overpriced, even in a robust market.
In today's Buyer's Market you simply have to be priced correctly to get your home sold. In fact, I'm seeing homes priced correctly being passed over by buyers for other homes that are also priced correctly or priced below market value. Usually, buyers are lucky to find one home that fits their needs as best as possible in their price range. Now buyers have multiple properties to choose from.
As an example, I have been showing homes priced from $600,000 to $1,000,000 in the southwest and western suburbs. You'd think I'd only have a handful of properties to choose from (and I'm looking from new construction up to 5 years old). I'd say there are about 75 homes in the areas my buyers are interested in. We've seen so many I think they're confused. And that's happening a lot with buyers.
Then there are buyers that feel the need to view all homes in their price range to be sure they're making the right choice. When they finally decide they want to make an offer on a particular home they find out it has been sold. They liked it but it was in the beginning of their search and they thought they had time with the doom and gloom news of our current real estate market. But if they liked a particular home because it was the best buy in the price range then it's a good bet someone else will feel the same.
Which brings me to the mantra I've written about many times: Any property will sell in any market if it's priced right! In todays market the market analysis that was used to give a seller an idea where to start is already outdated depending on how far back the agent preparing it went. In the areas I work in it seems that prices are continuing to decline so going back 6 months ago isn't current information.
For example, I have a great Orland Park home for sale and the feedback has been very positive. Many agents have said it's priced correctly and their buyers are considering it. But the showings are still sparse and there hasn't been any offers in more than a month on market. The sellers are working with me by taking a price reduction pretty quickly. I'm really wondering how low they're going to have to go to get an offer. The comps showed $325,000 and we're at $318,000. In a better market we would at least have gotten an offer by now. But this is the market we're in. UPDATE: We had to keep reducing and when we got to $300,000 activity picked up and the home sold for $289,000. This home was an oversized 3-step ranch on a large lot that was in wonderful condition but everything was original and dated. Although it originally "comped out" at $325,000 on paper, buyers felt it was too dated, no matter that it was on a huge lot and was oversized.
Bottom line is that no amount of marketing will sell an overpriced home. You can no longer pad your price in the hopes that someone will at least make an offer. Why would they make an offer on an overpriced home when they have plenty of homes priced correctly to choose from (and make a lower offer on those)? It's supply and demand, and the supply of available properties far outweighs today's demand.
If you have to sell right now then you need to price correctly. If you don't have to sell now maybe you should wait. Even the best real estate agent can't perform miracles - they can offer marketing and help you price your home properly. Only the current buyers in today's market can tell you what your home is worth. And unless your buyer is paying cash there will be an appraisal that can break the deal depending on the down payment and the buyer's financing and qualifications.
If you'd like to get an Internet Market Analysis please click the link and fill out the easy form. As an active real estate agent that is out showing and selling homes, I know today's market. Between the market analysis, amount of showings and feedback we will work together as a team to get your home sold. If you'd just like to see an instant, computer generated value - click here.