Home sellers can gain a tactical advantage over their competition by conducting a thorough home price range analysis, but many are failing to undergo this critical process.
More than 40% of all home sellers who listed a home for sale in Tallahassee in 2012 failed to sell their home, and the top reason was poor preparation.
Imagine trying to move your family from one home to another due to a positive experience in your life, but not being able to get rid of your previous home. The pressure of making a second house payment has often proven to be a terrible source of stress for families in our tough economy.
Preparation Is The Home Sellers Advantage
But you can avoid the double-payment problem by getting your previous home sold fast. Now that we are selling homes on the internet, all of the data is there for home sellers (through their wisely chosen real estate agent) to analyze the market and price their homes correctly. By way of example, let’s say you have a home that is worth around $350,000. In Tallahassee, your well trained Tallahassee real estate agent could produce the following information:
|Leon County Inventory Report|
|Relative Supply of Homes – January 2013|
|As seen on www.Manausa.com|
|For Sale||Sold (Past 12 Months)||Months of Supply|
|Leon County (Tallahassee)|
|$900,000||–||$950,000||1||0||1||0||0||0||No Sale||No Sale||No Sale|
|$950,000||–||$1,000,000||4||0||4||0||0||0||No Sale||No Sale||No Sale|
The information in the table shows that there 13 months of supply of homes in the $350K to $400K price range, and 8.2 months of supply from $300K to $350K. Both of these ranges have more homes than buyers in the market. Furthermore, we know as the higher priced homes languish on the market, these home sellers will yield to price reductions.
These price reductions represent future competition in the market. For example, home sellers priced at $390,000 who reduce to $325,000 represent new competition for home sellers currently on the market at $325,000.
And guess which home sellers will be favored by most buyers?
The future competition for home sellers in this price range will be a mix of those home sellers who have dropped their prices as well as home sellers who have failed to sell their homes in the recent past.
Homes That Recently Failed To Sell
When we measure the number of homes that recently failed to sell, we find that more than 3 home sellers every day are joining this unfortunate group.
Considering that fewer than 7 homes are selling every day in the Tallahassee MLS, this is not an insignificant number of unhappy home sellers.
Home Sellers Must Choose Wisely
In a room filled with cups of water, he must choose the Holy Grail, containing the holy water that can heal his father.
But if he chooses incorrectly, he will die, as all the other cups are filled with poison.
He carefully looks throughout the room at hundreds of choices, and then makes his decision (based upon extensive research as an archeologist).
He drinks from his chosen cup…
And the old knight guarding the room exclaims
You have chosen wisely
Now flash forward to real life, it’s four months from now, will you still own the same home that you were hoping to sell? Or will the old knight be able to exclaim “you have chosen wisely!”
Home sellers must choose wisely when selecting a real estate company, or they will join the growing ranks of those who failed to sell their homes.