How Long will it Take to Sell My House?
Dave: How long will it take to sell my house? Also, as a prospective home seller, what is the significance of the length of time my property is on the market?
Steve: Dave, that is THE QUESTION isn't it? There are three main factors that determine the speed of sale:the price, the condition, and the location of your property. This blog post just skirts around those issues :-) . It is mostly about the interplay that "Days on Market" has with pricing and your net bottom line.
One of the first things that buyers will want to know before making an offer on your home is how long it has been on the market compared to similar homes in the neighborhood.
Most buyers tend to make lower initial offers on homes that have been for sale for more than the community's average. The buyer's agent will determine the community's average days on market for his client and as the seller, your listing agent should have provided you this information when you discussed how to price your property.
Dave: How do buyers know what my home should be selling for?
Steve: The rest of this requires a long answer Dave. There is no mystery in obtaining historical sales figures for your neighborhood, as all previous sale prices are available for any realtor's consumption and the buyers they represent. That is one reason that you need to price your home correctly right away and not price it above what the current market conditions show as appropriate for its condition and location. This does not mean that you need to UNDER PRICE your home!
It means that you and your agent should analyze the condition of your property and its location compared to the other comparable homes that have sold within the last few months in your area, and price it "at market" when you first publish it for sale.... not above and not below. Do not use Zillow or any other public estimating software...they are not accurate enough for this. Their data is not detailed enough for your purposes.
You see, all buyers have access to the very same data that you do, if the buyer's agent is worth a hoot. Also, buyers tend to offer less for homes that sit unsold for more than the community average of days on market. They assume that the home is over priced or that the seller must be getting anxious for a sale.
Therefore, they submit offers you will not be happy with. However, if a home has been available for only a few days, buyers tend to make offers closer to the list price, if that price is close to the true market value for the area.
If the days on market for a property is high, some buyers will not consider it, thinking something must be physically or structurally wrong.. Smart buyers know that what is probably wrong is that the list price was set higher than current market value and they use the high days on market figure as justification for negotiating a lower price.
Dave: This is getting to be a pretty long explanation. Could you summarize?
Steve: In summary, as a home seller there are two reasons you need to be aware of days on market:
-First, the longer your property is on the market, the lower the offers will be from buyers. This is why homes almost always sell at their highest price within the first 3 weeks of being listed, especially in a depreciating markets where prices have been historically weak. Have your listing agent provide you with the data for your area, to determine if available housing inventory is high compared to sales, which would indicate a depreciating market where more power lies with the buyer, and more pressure on you the seller
-Second, you need to understand average days on market since it is one of the items you should bring up when interviewing prospective agents to list your home. All competent, professional Realtors can give you complete days on market data for your neighborhood and they should be able to show you how to price your home using price per square foot and/or percentage of sold price to tax assessed value for comparable properties.
You should be presented with an an easily understandable spread sheet. There is no mystery to evaluating days on market and although figuring out an appropriate initial list price for your home requires some art and subjective evaluation, as well as logic, any good agent should be able to lay out the facts and have a coherent pricing plan with the figures to back it up.