Selling a Home

Doesn’t matter if it’s a Buyer’s or a Seller’s Market

This post, from Agent Genius, had me thinking about something and I tought I would expand on a comment I made on the site.

It doesn’t matter if it’s a Seller’s Market or a Buyer’s Market I still do all the same tasks regardless of market conditions.

In a Seller’s Market properties move pretty quickly, but that doesn’t mean I should scale back my marketing efforts. If anything I should continue the same volume of marketing. That way I can help more perspective buyers find a home and at the same time I’m creating future business.

In a Buyer’s Market we’re expected to do more short sale business, contact expired listings and do open houses. I think all of these should be done in both market conditions. Just because the volume of one part of business decreases that doesn’t mean I should stop doing that task. If anything I should continue to do those tasks, that way when the market does change I’ve already been ahead of the game.

I expect my business to have constant growth while I do all of the tasks that are possible to generate business, but that doesn’t mean I won’t have an off year, but it does mean I’ll decrease my chances of having a slow year.

Over Pricing a Home in a Buyer’s Market

The cost of over pricing your home can vary from home to home. Some reasons could include relocating, life/family changes, seeing if you can take advantage of low prices, etc. (7 in Yellow)

To summarize what this chart is trying to say is if you start your list price too high you could incur unnecessary holding costs.

Fair Market Value during a Buyer’s Market will decline, sometimes greatly, sometimes slowly.
Initial List Price in this example is of someone being hopeful they will get a higher offer. In this case the Initial List Price is set above Market Value, what Buyer’s are willing to pay.
Market Interest drops as Inventory increases and pricing above Market Value decreases interest further.
Salable Price will decline as Market Value declines and Interest declines. When a home has been on the market too long it becomes market beaten.
Price Reductions need to be significant enough to drum up interest and move with the market. Otherwise small reductions will be chasing the market as it declines.
Sales will occur when Buyer’s see an attractive price.