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3 Common Mistakes Sellers Make in a Seller’s Market
Dated: August 11 2020
Most of the country is currently experiencing a hot real estate market, also known as a deep seller’s market. Yes, even in the midst of the coronavirus. Our local market here in the Tri-Cities has many stories of homes showing a dozen times on the first day on the market with multiple offers (some over asking price) and going under contract a few days after being listed.
However, there are also homes that are lingering on the market for months and some that are not selling at all. How can that be? Doesn’t a seller’s market mean, “If you list it, they will come?” Even in a hot market, there are still some fundamentals that do not change. Many sellers (and unfortunately some real estate agents) still make mistakes when trying to sell their home. Here are 3 of the most common.
When the market is hot and homes are going under contract in days instead of months, many sellers think this is their golden opportunity to cash in. While that may be true, no one wants to buy an overpriced home. Pricing well over market value severely limits the number of buyers that will even look at your home and potentially causes you to sell below market value as you “chase the market down.” Also, pricing your home above market value can put your home in competition with newer, updated, or bigger homes. Even if you get someone to offer you over market value, you can run into problems when the appraisal doesn’t support the price. Most real estate agents are extremely familiar with the pricing pyramid. This diagram is based on many years of statistics and illustrates that pricing over market value sharply decreases the number of potential buyers in the market for your home. Another graphic shows data from Realtor’s Property Resource (RPR) on time on market versus price reduction in Johnson City, TN. This illustrates what I mean by “chasing the market down.” The longer a home is on the market, the more price reductions that happen before it sells.
Pricing your home at market value from the beginning will make sure that your home sells for the most money and in the shortest amount of time possible. An experienced real estate professional can walk you through a comparative market analysis to help set the market value of your home. No algorithm can replace a professional’s knowledge of the local market.
2. Not Preparing/Staging the Home for Sale.
Another common mistake is not taking the time to prepare your home for the market. Keep in mind that even in a seller’s market, you are still competing against other homes. You want your home to appeal to the largest number of buyers possible. Contrary to popular home improvement shows, most buyers want a move-in ready home and are not willing to take on major repairs or updates. There is a difference between buyer’s preference and buyer’s concern. If a buyer does not like the paint color of a room or certain light fixtures, that is a preference that can be changed easily by the buyer after purchase. However, if a home is dirty, cluttered, or too many items need to be repaired or replaced – then it becomes a buyer’s concern. While many buyers may want to update a home (eventually) to suit their tastes, most do not want a home that requires any major repairs or updates before or right after moving in. Some of these shortcomings can be made up for with pricing considerations, but many are just simply a turn off for a lot of buyers no matter what the price. This is where an experienced real estate professional can help advise you on what can be done to help with the appeal and marketability of your home. There is much than can be done for little money and a modicum of sweat equity.
3. Restricting Showings.
In any market, sellers that place too many restrictions on when or how buyers can view their home will severely limit the ability to sell their home quickly and for the most money. This is a common mistake of people that sell For-Sale-By-Owner as well. Buyers (and their agents) are people that have jobs, schedules, and lives. They may only have certain days/times available to view homes that interest them. Even in a market with limited inventory, if a buyer is unable to schedule a showing of your home, then they will simply move on and may or may not circle back to schedule a time to view your home. Obviously, there are sometimes (parties, dinners, meetings, family visiting) that you cannot make your home available for a showing. However, those should be the exception and not the rule. An experienced real estate professional will coach you on making your home available for showings so that any buyer interested can view your home.
As you can see, even in a seller’s market it can be tough to sell your home. Every home is unique, and every home seller has unique goals for the sale of their home. The advice and experience of a real estate professional is always your best option for selling your home so that you can move on to the next chapter in your life. For more advice or information, please feel free to contact me.
This article was written by Jay Cottrell, Affiliate Broker with eXp Realty LLC. The content is based solely on the opinions of Jay Cottrell and not those of eXp Realty.
Required Brokerage Information: eXp Realty, LLC | 3200 W. End Ave, Suite 500, Nashville, TN 37203 | 888-519-5113
EXPECT MORE. Growing up in Northeast Tennessee it has been a passion of mine to help others. I also have many years of experience in building and running successful companies. As well as over 5 years....
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