It goes without saying that when you sell your home, you want to sell it for the highest price in the quickest amount of time. The current environment of the real estate market already favors buyers and makes it more difficult than in past years to sell your home.
Don't make it even harder!
If you overprice your home, you'll face the daunting reality of losing out on up to $54,528 after your home languishes on the market for 9 months or more.
Yikes!
How did I come up with this figure? I thoroughly analyzed the sales of all homes in Alexandria, Virginia that came on the market and sold during the past 365 days.
Let's look at the good news:
- 1,460 homes that were listed for sale in Alexandria between January 6, 2008 and January 6, 2009 have actually SOLD!
- Most homes sold quickly in Alexandria: 1,125 of these homes sold in 90 days or less, or 77% of all the sales. Of those, 682 were sold in 30 days or less -- that's 46.7% of all the sales. Alexandria and Arlington are still hot markets.
- Only 37 homes that sold took over 9 months to sell.
Here's the bad news:
- 3,192 total homes came on the market during this time and only 1,460 sold.
- Almost 550 of these homes are still on the market (though most of those came on the market in the last 6 months).
- That leaves around 1,100 homes that did not sell -- they were either withdrawn from the market or expired.
- Only 48.5% of homes listed for sale in the past year actually sold or are currently under contract for sale.
Now, here's the Guaranteed Way to Lose $54,528 When You Sell Your Home:
Examine the following chart.
ALEXANDRIA, VIRGINIA HOME SALES – PAST 365 DAYS
|
DAYS ON MARKET |
# of SALES |
% of ORIGINAL LIST PRICE |
|
0-30 |
682 |
96.96% |
|
31-60 |
258 |
94.05% |
|
61-90 |
185 |
91.99% |
|
91-180 |
224 |
89.29% |
|
181-270 |
74 |
88.35% |
|
270-365 |
37 |
88.44% |
As you can see, the faster the sale, the higher the sales price as a percentage of the original listing price. The longer a home is on the market, the less chance of the seller getting close to the asking price.
The difference between a sale that occurs in 30 days or less and one that takes more than 9 months is a whopping 8.52%. With the average sales price of a single family home in Alexandria around $640,000, this equates to a $54,528 loss.
Further analysis shows that $30,975 of that $54,528 loss is due to price reductions that happened over time as the seller tried to chase the market down. The rest of the loss is due to buyers offering significantly less than asking price as they perceive more seller desperation the longer the home stays on the market.
Even homes that sold in a relatively quick 61-90 day timeframe suffered a significant decline in sales price/original list price ratio -- almost a full 5% loss. This would equate to $31,808 lost on an average single family home in Alexandria.
There's one very important lesson to learn from this, if you want to sell your home for top dollar, make sure you and your Alexandria real estate professional price it right from the start.
Here's some additional blog posts that I've written to get you started on the right foot when it comes to pricing your home for sale:
If you want my love then take my advice... Adjust Your Price
Will the Sellers Come Down on the Price?
Come on Down! You're the Next Contestant on The Price is Right
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