Yes, I totally agree with your reasoning.

Here is the million dollar question....how do you get the sellers to "get it"?

Great Localism post. It would appear, by your graph, that a good number of sellers do "get it". There will always be those who think they know better than the industry experts, but they are the ones in the 3-4 months category.

Petra, it's certainly not easy, is it?  There are a few things that I try to be very frank with them about (and provide data to support my advice). It's all a matter of how motivated they are to sell, right?  If they really want to be in that group of 30 to 60 day settlements, then they need to price very aggressive immediately--no "let's price it mid range and just see what happens."  If they miss the first 30 day window, then the price cut needs to be very fast, and very dramatic, to get into that 60 day bucket.  After that, it's very likely a losing battle.  

Andrew, thanks for the comments.  Yes, I think an increasing number do, in fact, get it.  However for every successful sale (as shown in the chart) there are 5 more homes in Arlington that didn't get it.  So really there are sellers who get it quickly (the 30 to 60 day sales), sellers who get it eventually (the other sales), and still sellers who either don't get it at all or get it and their hands are just tied by other circumstances (the remaining actives).  

Katie, Wonderful! I love your summary.

great post. i list a lot of properties in vermont and find the trend is about as even as your in dc. the sellers that 'get it' walk away with more money and faaster. those in fantasy land wait longer, pay carrying costs longer, and get less in the end.

I'm hoping that 2008 is the year for Sellers to GET IT!  If the media could catch up to what is really happening in the market place then maybe they would get it.

Great post, Thanks. 

As a seller I am offended by constantly hearing that I need to get it.  Realtors need to get it, the way you market a home today is not the same as the way you would market a home in a sellers market.  The market has changed, but realtors have not.  They are not offering sellers anything other than lower the price.  If it is only about price, then realtors would not be needed, because sellers could use lower fee services to get their homes on the MLS.  Anything will sell if you lower the price enough.  When will realtors "get it" and offer new selling strategies that combine realistic pricing and avenues to bring in buyers.  Advertising on realtor.com and the newspaper just aren't enough in today's environment.  What are YOU doing differently to earn your commission from the seller?

ar2cm - You make some valid points -- there are in fact lots of Realtors out there who don't do much beyond placing a home in the MLS, which is very unfortunate. Today's market does require more!  Many agents on this site and others do, in fact, have much more robust marketing plans for their clients that includes free professional staging, professional photography, web presence outside the MLS (dedicated sites, syndicated sites, etc.), open houses, creative pricing and incentive strategies, mailings to area renters or trade-up candidates, agent-paid warranties, special rent-to-own incentives, and other activities.  If you're dissatisfied with an agent's approach, I'd encourage you to interview others.  Because agents are for all intents and purposes self-employed, you'll find that their activities--and how much of their own time and money they spend marketing their listings--varies widely.  However, all of those activities just get the buyers to the house.  Once they get there, even the best marketing plan and thousands of dollars in advertising won't sell a home that's priced incorrectly.

Katie - One of the problems I see is that the local paper is still running articles on how strong our market is and that we have not lost much value.  Days On the Market keeps growing, but some sellers are still unwilling to acknowledge that the competition keeps growing.

great advice. People think there are no buyers, but there are! They just are only willing to pay what they are willing to pay. Sellers can either sit, or sell at market value. Their choice.

To ar2cm:

We do get it here which is why this place is so powerful for you as a consumer.  When everyone understands that old style marketing won't work and even price cuts are not a cure all, then you'll be better served.  Read the blogs and make your list of questions to ask as you are interviewing.  You'll be better armed to make a great decision on someone you like and trust but more importantly someone who can compete in this marketplace of micromarkets. 

But it is still the price, always. 

I would argue that in addition to pricing, a house needs to look better than its competition in order to sell in those first 30 days. Buyers can afford to be choosy, and most want a home that is move in ready and will not require alot of "fixes." 

I want to add that buyer's agents need to maybe try a little more salesmanship with their clients.  Obviously, you want to meet their must-haves, but there is a balance.  A home doesn't have to be 'perfect' to be the perfect home.  Saving a bit on a home that may need minimal updating could be very beneficial, especially to the first-time buyer.  I find that a lot of agents will just keep showing house after house after house as their buyer rejects them for minor reasons.  Besides killing their profit, it is stressful, exhausting, and can be unproductive.  I recommend more listening, and less driving!  It would help with the inventory issue, and therefore pricing...

Great post. Good point about watching and tracking micro-markets. An average doesn't tell an accurate story.

Good points. I don't think the longer market times have as negative of an image as in previous years, but pricing is always key, whether in a sellers market or a buyers market.

I know how to make buyers 'get it'.  That is my job.  I make houses 'gettable'.  It starts with the seller.  They have to make their house appealing in more ways than just price.  That is what staging is all about - preparing for the market so that buyers 'get it'.

Very good blog, our property time on market is called CDOM. Your Orlando & Lake Mary Real Estate Expert, Heather Joubran

Very good blog, our property time on market is called CDOM. Your Orlando & Lake Mary Real Estate Expert, Heather Joubran

Very good blog, our property time on market is called CDOM. Your Orlando & Lake Mary Real Estate Expert, Heather Joubran

I agree. DOM makes a huge difference.

Use stats right up front during your listing presentation. 

Remember when sellers would say "Lets put it on the market and see what happens."

Now explain to the seller that "the market has already spoken to the houses that were already listed. Lets learn from them and price your home accordingly."  This works for me all the time when I try to get the seller to price realalitcily.

Hi Katie, great post with very valuable information.  I agree with you.  Thanks for sharing! 

Great Point ... thanks for sharing the comparison

Yep.  What was once location, location, location is now price, price, price.

Did you say between 30 and 60 days in the market? I should move up there,

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Despite a market with huge downturns in number of transactions and huge increases in inventory and an inventory in some area with a 5 year supply of homes - we've sold more than twice the number of homes this year as last - enough sellers are "getting it" that they meet what buyers are willing to pay. These sales are now the comps, further impacting the market.

How do you get the sellers to "get it"?; have not only a brokers' price opinion done, but in this market a must is a formal appraisal. This will help immensley; I guarantee it.

Donna Zorn

Who is this 'Ed' guy?

Homes that are priced well will sell. It is the homes that are too high that sit and sit and sit.

Katie,

Great post, you are right on the money.  I use stats, comps and whatever else I feel will help my client "get it" and if they don't, I don't get their listing. 

Yes, yes. DOM look BIG.... how do you get this over to the sellers?  The ones I am running into still are stuck back in 2005 when all it took was the words "I wanta sell" and the property had multiple offers.

Katie, I fully agree. If you want the property to move, price the puppy right. If not the agent will lose money and time. My suggestion is don't take the listing. Let some body else spend the time and effort.

Kay, Craig, Kelly, Heather, Denise, Allen Lenn - Thank you, and thanks for your comments!

Chelle - I hope so too!  It would be wonderful to work through the inventory backlog quickly.

Ira - That's an issue that I wish I had!  It's quite the opposite here--newspapers are all doom and gloom, reporting terrible averages in "Northern Virginia."  The problem is that they are defining the area as many counties, and in some cases stretching all the way to West Virginia and calling it our "local" market.

Sean - Right you are.  Sit or sell: It's not an easy question, but it is a simple one.   

Linda - absolutely!  Buyers are incredibly demanding and will quickly walk away from even small problems--another side effect of too much inventory.  

Maria - It's only a portion of the market that is moving that quickly, so don't pack your bags just yet :) 

Bob & Carolin - Agreed!

Joe - I agree as long as that need for updating or maintenance is reflected in the price.  As a few comments indicate, in this market the home really needs to be move in ready, or it will be heavily penalized in pricing by today's choosy buyers.  Listening and setting expectations for buyers is key, though.  

Kimberly - I agree staging is a must!  

Donna - Great idea on the appraisal!  

James - I really like your phrasing that "the market has already spoken to the houses that were already listed. Lets learn from them and price your home accordingly." I may borrow that!

Sharon,Fran:  thanks for your comments!

Rosemary: I think the key is to provide detailed stats for their neighborhood.  If they don't believe the numbers, it may be worthwhile to take some sellers around to preview their "competition." 

Frank - I agree!  I wouldn't hesitate to walk away from a listing if the seller refused to price it properly.  

Excellent analysis of the data that goes beyond the norm.  Vital point were made in the discussion, too.  It can't be "only" about price, there have to be other strategies to bring the buyers to the table.  We have to find the balancing point that brings in the buyers without the seller's equity evaporating completely.

Katie, you may want to differentiate between average DOM and median DOM.

Info: Understanding Averages and Medians

Thanks!

Frank Jewett

Marsha - thanks!  Yes, the discussion drew out lots of great points. 

Frank - Excellent point.  The median DOMP right now in Arlington is 83 - still enough to miss that critical 60 day window, but far less than the average 107 that often gets reported.  Even more reason for buyers to understand that they don't necessarily have 3-4 months to wait before making an offer on a place.   And for sellers, more of a reason to focus on those first 60 days.  If a listing is on the market more than 83 days, it's already in the bottom 50% of the listings in terms of time on market. 

Many sellers are starting to get the message, that value is the name of the game right now.  the buyers must see it or it will not sell.

Katie, If I understand this passage correctly:

Looking at the 174 successful settlements for October 2007 in Arlington, I've graphed how long they were on the market prior to sale. We can see from this chart that the average of 107 (which would fall into the last column) isn't a good representation of "successful" sellers.  In fact, 45% of successful sellers had a contract in under a month, and almost 60% had a contract in under 60 days!

Your median must be between 30 DOM and 60 DOM.  Am I misreading your graph and comments?

Here in Santa Clara County, we follow these three numbers:

• Median DOM for available listings......77 days
• Median DOM for sales (contract)........41 days
• Median DOM for closings..................32 days

From your information, I'm guessing your numbers are similar.  Our average DOM for available listings is 101, which is skewed up from the 77 median by leftover turkey outliers.  The number that jumps out at me is the 32 day median for closings.  Clearly buyers need to be ready to act fast (prequalified) and sellers don't need to wait long to determine whether they have missed the market with their asking price.  Properties that are priced right still sell quickly.  Our bloated inventory is a function of bloated prices, in my opinion.

Thanks!

Frank Jewett

Frank, I think I understand the confusion now -- Sorry about that.  The median of the SOLD listings is somewhere between 30 and 60 days.  That graph represents only the successful sellers in the County--the sold listings.  The median of available listings (unsuccessful sellers) is 83.  So yea, I belive our numbers are similar.  Your 32 day number is an eye-opener for the same story-line:  You hit it on the head with sellers needing to act quickly, and buyers need to be prepared to jump on a value when they see it.  

Seems like the toughest part of some listings is to educate the sellers on what it takes to be competitive.

Good Advice, Katie.  Thank-you.

Bill - Yes, definitely.  It's tough to define "value" but I think there were some good comments here about it being both condition (to include staging when appropriate) as well as price.  The fact is that you need to be the best in both of those things to sell.  

 Matthew - You're welcome!  Thanks for reading! 

Looking at data for unsold listings is modeling on failure.  I focus on the SOLD stats because that is presumably the group our seller wants to be in.  No doubt many sellers here in Santa Clara County are still clinging to the lottery ticket pricing model ("Maybe I'll get lucky"), but no agent in his or her right mind would want to waste time and money on those lottery ticket listings.  If the seller prospect doesn't want to be in the SOLD group, it's time to find a better prospect.

Thanks!

Frank Jewett