Many brokers and sellers work the equation of selling backward. They start at the desired sales price and work in reverse to ensure the home is marketed and presented properly to achieve that price.The lead-up to going on the market is all focused on one goal: selling. While this approach typically works, sellers with homes that are lingering on the market longer than the average time on market for their local area may be wondering what’s wrong. if your home is not selling, it is for one of three reasons. One, there is a product problem; two, there is a market problem; or three, there is a price problem.
A product problem means something about the home is a turn-off for buyers. Examples include units needing a total renovation where any potential purchase requires significantly more time, money, and energy before moving in. Generally, most sellers know if they have a product problem. Hopefully, many sellers knew this when buying in the first place, so it’s not a surprise now.
The solution, unsurprisingly, is a price adjustment. Sellers with problematic homes need to drop their price to a level where even buyers who would normally not be interested start to run their own mental calculations to see how much of a deal it could be.
A market problem means there is something off about the market itself. A more typical example is today. After a massive surge in sales, the markets have contracted back to lower-than-typical seasonal levels. For sellers, this means fewer buyers and more competition. To mitigate this issue, sellers must stay on top of the real-time trends in their local area to ensure they stand out despite market movements.
A price problem is a nice way of saying your price is wrong. And in real estate, prices are only wrong one way: they’re too high.
In fact, most problems eventually funnel their way into a price problem. Whether it’s a first-floor unit with brick wall views or a park-view penthouse asking peak prices, the core issue is the price is too high. While some luxury sellers may have the advantage of waiting for their price, the net issue for all sellers with extended days on market is overpricing.
In short: The more the market changes, the more it stays the same. When it comes time to sell, do your homework, figure out which problems you may be facing and price it right the first time to avoid problems down the road.