Home > Blogs > Lee Alley > DIY Your Own Expert Smartphone Photography

"HOW LONG WILL IT TAKE TO SELL MY HOME" ?

By Lee Alley

Services for Real Estate Pros with Pro Mobile Photo

September 25, 2009 03:44 PM

We always get this question from sellers. Always. For good reason.

Selling a home is never just an isolated transaction . There is always some greater personal milestone or life goal behind our decision to sell. Perhaps a new baby calls for more bedrooms, a new job needs a home office, or career move allows 'moving up', an elder parent moves in, or it's just time to invest in a vacation retreat in preparation as a place to retire.

It also depends on when you ask. When an individual home is initially listed, it's anyone's wild guess how long that specific home will take. (My fellow mathematical statisticians refer to this as a Poison-distributed Probability Function). That's just big words that mean simply, we don't know.

However, we can tell you how long it took to sell the homes that sold around Rapid City region during June 2009. For homes sold for $100k-$200k, the median DoM was 47 days. For $200k-$300k it was 64 days. And for $300k and above the median DoM was 107 days.

It grows more complicated. After a home has been listed for an extra long time, things change. Bottom-fisher buyers and leave-no-prisoner investors start showing up. Their tough demands for below-market prices mingle with more realistic market-driven prices. But after the home has been listed for longer than the average, every one starts suspiciously asking "Why?"

Our economist friends say that "price" is the primary factor that reconciles supply and demand. For us when selling a home, that means when the "right" price is reached, a deal will be made between supply (seller) and demand (buyer).

So. "How long will it take to sell my home (on average)?" That depends on exactly three things: Price, Market Demand, and Days on Market (DoM). If you lock in any one of those, then the other two factors will self-align (on average). For example, if you insist on a specific Price, then DoM will go down if Demand goes up. If your life-transition imposes a specific deadline to sell (a specific DoM), then sale Price will go down as Demand goes down. If Demand is a constant factor, then if you want DoM to be a short time period then you'll need to prepare for a lower sale Price.

So you get to affect two of the factors. If, worst case, your lender insists you must sell for a specific Price (or higher), and if you simultaneously impose a deadline on DoM, then it turns in to a compete crap shoot whether market Demand will or will not be adequate to yield a sale.

Notice that does not include the seller as a factor in how long it will take. Sure, your agent's advertising campaign effectiveness will determine which buyers will consider your home. But your price is your surrogate in this dual. It's unfortunate how many sellers I talk with who want to "set the price higher because I need (this much)." Sorry, Sellers. It doesn't work that way. The seller gets to set the initial price. But The Market (buyers) will set the final sale price.