The article below will appear in a newspaper in January in Big Canoe. I am hopeful that this is a regular piece. Each month we will do something to help either buyers or sells.. Any suggestions for future s will be greatly appreciated
Ask a Realtor
Are you and your home chasing the Market?
By Charlie Ragonesi
One of the maxims in real estate is; houses priced correctly sell. In the listing presentation there is some times a tension between the Realtor and the home owner looking to sell. That tension often expresses itself in a difference of opinion over sales price. Sellers tend to forget that Realtors are usually paid a percentage of the sale and so do not want to leave anything on the table. Realtors often forget the sweat equity, the emotional, as well as financial ties, a home owner has in the home. The compromise is often reached with the words, “Let’s price it at X and we can always come down a bit later, or when we get an offer.” This strategy is called, Chasing the Market.
Chasing the Market is a bad strategy that will in the end cost the home owner money. A great study was done this (2009) year by Todd Emerson a Senior Vice President and Realtor. The study was done in the Atlanta market. Todd looked at 115 single family home sales from January to April. 54 of those homes had price adjustments downward to reflect market conditions. These homes stayed on the market an average of 210 days. They also sold at an average of 81.3 percent of the original list price.
The homes that were not reduced sold at an average of 92.9 percent of the sales price. They also remained on the market for an average of only 129 days.
The conclusions Todd drew were that prices on homes that chased the market stayed on the market 3 months longer AND averaged 50,000 less at the closing. Todd did average all the prices and was comparing like priced homes.
Charlie Ragonesi is Managing Broker for All Mountain Realty. Along with Linda Carrig they can be heard every Thursday after the noon news on WYYZ Radio broadcasting the Mountain Real Estate Report in the North Georgia Mountains