I like the format of the “open letter” — props to Dave over at New Media Chatter, I’m copping your “style”
Dear Seller of Overpriced Home for Sale:
It would be a perfect world if you get the exact price (or more) you’re asking for your home. This however, is not a perfect world.
Look, we are NOT in the 2006 market. Or the 2005 market. Or the 2004 market. This is 2008/2009, and things are wildly different than when your neighbor sold their house. Have you been reading the news or not? Sorry, but you need to get over it and move on.
Today’s market (as in all markets) – and especially the pricing strategy – is simply about SUPPLY and DEMAND.
Let’s say your house is listed for $1.5M, and it’s been on the market for 90 days at that price. Guess what? The only person who thinks it’s worth $1.5M is you. Know why? Here’s an abstract way to look at it:
So what will you do?
If you don’t want to take less than your listing price, you may be in for a long, long wait.
If I was your agent, I’d first ask you: “do you want me to tell you what you WANT to hear, or what you NEED to hear?”
If it’s the latter, then I’d say you’re not motivated enough right now, and the best thing you can do is take your home off the market — listings that do not sell usually need price reductions to get them to a marketable range. Take it off the market for a while, lest it grow stale (which it probably already is at that price), and reassess in a few months.
If you were motivated enough (read: you absotively NEED to sell), then I’d tell you to price your home correctly and competitively so that you won’t be “chasing the market”
The best way to get your home sold, is to understand what your “demand” looks like, and PRICE it so that the demand (the buyers) flock to it.
Supply and demand. Understand it and embrace it, or be stuck with a home that no one wants to see.
- Say there are 5 homes in your immediate area that are all listed for $1.5M (= the SUPPLY)
- Now say there are 10 buyers in the market right now who can actually afford a $1.5M home if they can find the “right” house (= the DEMAND)
- But, if not one of those buyers paid a second glance to your home at that price, then NOBODY thinks they should pay $1.5M for it . Guess what? The DEMAND now equals ZERO.
- It’s a lonely dance floor when no one wants to dance with you.