Are you concerned that your home may be priced too high? Price is a major contributing factor to how many days your home sits on the market. The longer it’s listed, the less likely it will sell at top dollar or at all for that matter. So, it’s important to understand the signs that your home is overpriced or you may lose the chance to snag a buyer.
Your Home is Priced Top of the Neighborhood Market
Pricing a home at fair market value involves looking at similar properties recently on the market and the price they sold at, as well as current homes for sale. While comparable homes can be found across multiple neighborhoods when similar communities are in the same area, the easiest way to narrow down listings is to look at the neighborhood the home is located in. If your home is the highest priced, it could be overpriced.
This may sound obvious, but depending on the neighborhood and price range, better comparables may be found in a different community. For example, some developers reserve a few lots, especially waterfront lots, for custom homes when creating a new community. Those custom homes may not be in line with the semi-custom homes built on the other lots, so it may be justifiable to look outside the community for a similar property.
Sometimes homeowners try to justify a listing price for a more conventional property with upgrades and renovation costs. While updating a home can add value, the costs can outpace what a buyer will actually pay for the property. This is where you need to factor in motivation. Depending on the urgency to sell, a price drop may be in order.
Showings Have Slowed Down
Many new listings have a surge of showings right when they come on the market. If those showings have slowed down considerably, chances are good that your home is overpriced. The buyers that really want your neighborhood have already seen your home and determined the value doesn’t fit their goals. Now, you are facing the buyers who have done their research and determined your home is priced higher than similar homes on the market. Instead of scheduling a showing on your home, they are visiting the listings priced closer to fair market value. Performing a price drop can renew interest and show buyers that you are willing to work with them on a sale.
Other Homes in the Neighborhood are Selling
Even if your home continues to have showings, if other homes in the neighborhood, especially newer listings, are going under contract before yours, it’s likely overpriced. The good news is that the price may not be very far off. Your REALTOR® can run the latest numbers and give you an idea of where your home should be listed to be more competitive. Depending on the difference and the condition of the home, you may even be able to do some staging and/or improvements to make the current price justified.
Buyers are Submitting Low Offers
Your home is getting showings and you’ve received a few offers – but they’ve all been low. A good real estate agent will pull the comparable listings for a property before submitting an offer for their clients. If they feel the home is overpriced, they will submit an offer closer to what they’ve determined is fair market value. Sometimes a buyer just wants to lowball. However, if it happens multiple times, it may be an indication that the property is overpriced.
You’ve Surpassed the Average Days on the Market for Similar Properties
One of the helpful statistics that your REALTOR® can calculate for you is the average days on the market (ADOM) for properties like yours. If your listing has surpassed this marker, it’s time to rerun your numbers and see if a price reduction will bring the home more in line with what buyers are expecting. It’s possible that the fair market value has shifted since the day your home was listed for sale.
Keep in mind that being overpriced does not necessarily mean you need to drop the price on your home. That is the quickest solution, but the best approach takes into full consideration the condition of the home and potential improvements (temporary and permanent) that can be done to justify the price.
If you are getting ready to list your Wilmington area home for sale, we’d love the opportunity to discuss the services we offer sellers. We’ll put together a comparative market analysis that will show what your home should be listed for on the local real estate market. Give us a call or let us know a bit more about your situation by filling out this form.
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