In any real estate market, price is the key. It's just not as important in an increasing (seller's) market than in a declining (buyer's) market.
In a seller's market, if you miss the target, (market price), you can always wait for the market to catch up to your price.
In a Buyer's market, if you miss the target, not only will the house not sell, you will get angry and frustrated, the agent will feel helpless and worthless, and the home will lose value daily. Even in our buyer's market, with an average 147 days on the market, if a home hasn't sold in the first 27 days, you have lost your "honeymoon period." That is the time where the limited number of buyers that are out there, looking for the right home at the right price, would have bought the house if it was priced right.
After 27 days, the house loses the "new kid on the block" advantage.
In a buyers market, you have to price your home at tomorrow's market price, not yesterday's. If prices are falling 5% a year, then a $500,000 property today will be worth $498,000 next month and by the end of a typical escrow, $495,000. You need to price the house at $495,000 today so it can be the next home to sell, before values go down again.
What if you miss the target the first time? Request an urgent meeting with your Realtor. Do keep in mind however, that pricing is an art, not a science. Your Realtors suggested price is an opinion, only the current buyers out there looking will tell you if the price is right.
As a rule of thumb, if after the first 27 days, your home had a lot of showings, but no offers, the price is probably within 5% of market. But, if after 27 days there are very few, or no lookers, the price is likely at least 10% over market, or more. Most buyers are willing to offer 5% under the asking price and not be afraid of offending the seller, but very few buyers will offer 10%, or more, under the asking price.
The buyers, and their agents, will simply refuse to even look at a property that is 10% or more over priced.
During the first 27 days, and throughout the listing period, request to be kept informed of the market. Your Realtor should provide you with a new CMA every 10-15 days. These CMAs will give you an idea of where prices are headed and will allow you to react before its too late. As the seller you also have the right to know what new listings hit the market, or when a property goes into escrow or closes escrow. By day 27 you should expect your second CMA and possibly a price adjustment. If your latest CMA dictates that your home is priced appropriately for your market, you and your Realtor should take a second look at your homes marketing plan. Being an educated seller doesn't cost you anything but it could save you thousands. Stay on top of your home sale and don't forget, If the price is right... your home will sell.
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