One common search phrase that brings visitors to our site is "how long should it take to sell a home?"
It makes sense that homeowners who are thinking about moving should want to know how much time they should schedule in order to get a home sold, so I suspect we will continue to see this question for years to come, regardless of market cycles.
Today, we'll examine real numbers in the Tallahassee housing market to show how we arrive at an answer, and this methodology could work in any other real estate market location too.
Why People Want To Know About Time On The Market
There is another reason that this question is asked so often, and it relates to the deceptive or ignorant marketing practices of many real estate agents.
Some agents promote the concept of time on the market, and they go so far as to publish charts and graphs of time on the market as a way to demonstrate their "awareness" of market conditions. I devoted an entire article to this fiction several years ago, and you can find it by clicking the following link if you are interested in how agents use time on the market to confuse home sellers.
The Truth About Time On The Market
We like to tell sellers to expect their home to sell in 4 to 14 days. Why?
Well, we know that 94% of buyers are using the internet when shopping for a home.
We also know the 3 stages of the home-buying process, and roughly how long buyers spend in each stage.
When you combine these two important, measured facts, we know that there are roughly two to three months worth of "ready buyers" that are merely waiting for the right home to hit the market. If liquidity is ample for a home like yours, it only takes four days to expose it to 94% of all those "ready buyers," thus we should get it sold very soon after it hits the market.
How Long It Should Take To Sell A Home
The best way to understand this is with a real world example, and for that we will use the most recent Supply and Demand Report from the Tallahassee real estate market.
The following table shows the number of homes for sale in Tallahassee today, by area and price range:
For the purpose of our example, lets assume you own a home in Tallahassee that is worth roughly $350,000. If your home is in the Northeast quadrant of Leon County, then there are 204 homes already listed for sale. They represent your competition (Supply).
The next table shows how many homes sold in each price range and area over the past 12 months.
The table shows that 26 homes sold each month in the Northeast quadrant of Leon County over the past year, so we should anticipate that there are two to three months worth of ready buyers (52-78) just waiting for the right home to hit the market.
So the big question is this ... If roughly seventy people are ready to buy a home (like yours) but just haven't found the right one yet, and we show them your home, will they buy yours or somebody else's?
It only takes four days to get in front of 94% of those seventy people, so why wouldn't your home sell?
The simple answer is that it will sell if buyers see the value in your home, and it likely will not sell if they do not.
So long as liquidity is high enough, your home should sell right away.
What To Do When Your Home Does Not Sell In 4 To 14 Days
The first thing you should do is sit down with your real estate company to determine if the proper marketing was delivered. Did your real estate brokerage do the necessary work to properly expose your home to 94% of the ready buyers who were most likely to want your home?
If the answer is "no," then you should ensure that they get to work on it right away. You hired that real estate company for a reason, make sure that they did all the work necessary to get your home sold in 4 to 14 days.
But if the answer is "yes," and your home was properly marketed, aren't you getting sufficient feedback from the market regarding your value versus what else is available? And that brings you to a question about supply and demand ...
Now that ready buyers have purchased the better values on the market, will your home be next? Do current supply levels favor values appreciating up to your asking price, or do you need to reduce your asking price to meet demand?
Your real estate company should be able to help you with that answer. If your asking price is higher than they recommended at the start of the marketing process, you should go ahead and reduce your price to what they recommended, as it appears they were correct.
In our example above, there are 204 homes for sale with 26 selling each month, meaning 7.8 months of supply of homes. This is too many homes for the current rate of demand, meaning it is a buyer's market. It is likely that more homes will be entering the market each month, and only a price reduction will put this home in the path of those ready buyers.
Critical Advice Is Valuable
I hope the example above demonstrates the need for prudent research before you hire a company to sell your home.
There will come a time when you have to ask advice on pricing and negotiation, don't you want to ensure that you are working with somebody who understands market conditions so well that they can give you the perfect advice for every situation?
Anybody can tell you to lower your price, but doesn't this mean less money for you? If you are overpriced, you do need a reduction. But what if the problem isn't pricing, how will you know?
The key is to be able to trust the experience and expertise of your listing agent, so make sure that you hire the right one!
If you would like to know more about selling a home in Tallahassee, just drop me a note and we can schedule a time to review your home and the competition you will face when you enter the market for sale.