Home pricing is the most important aspect of home sales, in any real estate market. Any property will sell, regardless of the market, if it's priced with that surrounding market.
A common misconception is to price a home high when first listed and then reduce later. If a home is priced right, a home will get more showings, as you can see in the graphic below. More showings indicate the market feels the home is listed properly, and there's a feeling that a deal can be put together. In fact, if a home is priced right where it should be, the offer could come fast and even produce multiple offers, driving the price up!
As you may be aware, we are currently experiencing a buyer's market, although it is not quite the buyer's market it was over the past several years. Low interest rates are creating higher buyer demand, and we are also seeing fewer homes for sale. Depending on the location, that mix of higher demand and shorter supply is showing an improvement in sales prices.
Still, we are in a buyer's market, and in a buyer's market a home needs to be priced better than the competition and in equal or better condition. As you can see from the graphic below, the homes that are not well priced or not in the best condition aren't selling.
Recent sales data in Northeast Ohio shows that out of every 100 homes listed for sale, 46 fail to sell. This is actually an improvement over the fourth quarter last year.
Even with this improvement, of the 54 that did sell in the fourth quarter, 33 of the homes (60% of the homes that sold) required at least one price reduction. That tells us that 79 out of every 100 homes are priced incorrectly at the time it is listed.
To further dispel the the notion that pricing high at the beginning of the listing won't effect the sale or the price of the home, the graphic below shows the difference in homes that didn't require reductions versus homes that did. Homes priced correctly sold in 34 days for 96% of asking price, while the homes that required reductions sold in 191 days for 80% of asking price.
Again, the key to selling real estate is proper pricing. Related to that, is hiring an agent that has a solid marketing plan and can provide you with the proper research you need to make an informed decision on pricing. That way, you're not wasting valuable time and money and wondering why your home is still on the market.
I invite you to contact me anytime to discuss further.