In the realm of real estate, an unwritten rule governs the delicate balance of pricing negotiations – the taboo of lowballing. Offending sellers is a risk, and yet, sellers often miss this memo. Their belief that pricing high will attract lower offers puts buyers in a predicament. Sellers work with your agent and take considerable time utilizing their knowledge of market stats and graphs to correctly price your property.
Insights from the Fall Market
Recent data indicates that nearly 7% of for-sale homes in the U.S. experienced a price drop during the four weeks ending Oct. 29, the highest percentage since Redfin started tracking this data in 2012. Despite these adjustments, home prices remain up by 3% year-over-year.
In the Charlotte and Concord areas, the last 7 days witnessed 268 new listings but a staggering 270 price reductions. Yes, more price reductions than new listings! What can both buyers and sellers understand from these statistics?
Pricing Wisdom for Sellers and Buyers
A recent article from NerdWallet sums it up like this:
“Your house’s market debut is your first chance to attract a buyer and it’s important to get the pricing right. If your home is overpriced, you run the risk of buyers not seeing the listing . . . But price your house too low and you could end up leaving some serious money on the table. A bargain-basement price could also turn some buyers away, as they may wonder if there are any underlying problems with the house.”
Are You Priced Right?
There exists a price at which 100% of buyers would like a house, but conversely, half of the homes on the MLS are slightly overpriced and idly sit, attracting 0% of buyers.
Price it too low and you might raise questions about your home’s condition or lead buyers to assume something is wrong with it. Not to mention, if you undervalue your house, you could leave money on the table, which decreases your future buying power.
On the other hand, price it too high and you run the risk of deterring buyers from ever touring it in the first place. When that happens, you may have to do a price drop to try to re-ignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag for some buyers who will wonder why the price was reduced and what that means about the home.
Advice for Sellers
Despite the turbulence in Charlotte’s real estate market, homes are still selling. Be patient and ensure critical elements are in place:
Strategically set the right asking price: At or below the last comparable sale. Price for where the market is going, not where it’s been.
Optimize the look and feel of your home: Clean, tidy, and professionally staged homes stand out. Collaborate with your REALTOR to enhance appeal.
Invest in stunning photography and marketing: Beyond the MLS exposure, it's essential to reach as many potential buyers as possible.
If you're not motivated to sell, consider pulling your home from the market. For motivated sellers, signal your seriousness through pricing beneath competitors. Be patient, strategic, and work with your agent for wise decisions.
Advice for Buyers
With a 50% increase in homes on the market, embrace the abundance of choices:
Have your financial ducks in a row: Get pre-approved for a mortgage to understand affordability.
Consider selling before buying: Certainty about your current home's sale facilitates better decisions.
Don't fear negotiation: Some sellers are motivated, and list prices may not reflect their acceptable price.
Seize opportunities without bidding wars: Act promptly when the right property aligns with your budget.
Avoid writing impractical, low offers – it's a waste of time. However, if a house lingers at 2.5 million after 30 to 45 days, make a bold move with a 2.3 million offer. Seize the opportunity; few others are doing it.
Think long-term; your home is not just an investment but a place to call home. Enjoy the luxury of choices and make informed decisions.