When selling a property, most people have two conflicting emotions. They desire a quick sale, but if that is achieved, they fear that the property may have been undersold. Given you can only sell your property once, it is imperative to get the price right in the current market. Is time on market the key to getting the highest possible sale price though?
The answer somewhat lies in the market conditions. Time is unemotional and inflexible. In a rising market, time is your friend. Time will help carry the price toward your price target. In a falling market, time is your enemy. Time will erode your price. In a falling market, the longer you leave your property on the market unsold, the more time you give it to drop in value.
A property that sits on the market not selling can become a lemon in the eyes of the buyers. In such instances, it takes a massive reduction in price to stimulate buyer activity.
Time and Price
Many industry experts claim the key to achieving a successful sale lies in getting the three essential components of your campaign correct. Those components being: 1) Presentation 2) Marketing and 3) Asking Price. Getting your price strategy right will do more to achieve a quick sale than marketing and presentation.
When it comes time to sell, most people have a few agents provide opinions on the possible selling price of the property. The seller will also have an expectation of the price. What can get overlooked during the process of pricing, is what the buyers think the property is worth. At the end of the day, a buyer will only pay what they can afford and what they feel a property is worth based on the price of other properties.
To sell a property quickly, the seller’s expectation of price needs to overlap with at least one buyer’s expectation of price. If there is a gap on price, the seller needs to adjust their price expectations.
The maximum interest in a property will usually come in the first 14 days of marketing. The property is fresh to the market and grabs the attention of all potential buyers in the marketplace. The activity level on the home is unlikely to be higher than in the first 14 days. If a sale is not achieved, the seller will have to consider re-pricing or waiting for new buyers to enter the market. Waiting for new buyers to enter the market can really blow-out your time on market.
Attracting Multiple Buyers
Most sellers desire the situation where multiple buyers all bid strongly forcing the price up. If a property is listed with the correct market price, the chance of attracting more than one buyer is greater. In instances like this, there is a power shift. The focus becomes the maximum a buyer is prepared to pay rather than the lowest price the seller will accept. The highest possible price is assured if you have multiple buyers trying to buy your property.
It is okay if bargain hunters don’t like your price. It is not good if the fair minded buyers reject your property on price though. One of the worst ways in marketing a property is intentionally loading the asking price with intent of coming down in price over time. The best buyers will reject the home based on the initial high price and are unlikely to return later when the price has been reduced.
At the completion of marketing your property, if you are unhappy about the price buyers are prepared to offer, then you may need to rethink your plans.
Original article Peter O’Malley