Residential Real EstateRealty Reality: Sellers Need to Think Like Buyers
Sellers need to think like buyers. At least they need to do so when market conditions are normal, when there are more homes for sale than there are buyers competing for them, and when inventory is counted in months of supply rather than weeks or days. Moreover, the need for sellers to think like buyers doesn"t simply apply to presentation, curb appeal, and getting rid of the clutter. It also and especially applies to pricing.
The classic way of approaching pricing is by looking at comparable sales, and by looking at activity within the area of the home in question. However, in a market with increasing inventory and somewhat sluggish sales, it becomes increasingly important to look at all the competition. Sellers and their agents need to adopt a wider perspective than just the particular area where the home is located. They need to look outside of the tract or neighborhood, and to think about the choices that a prospective buyer will have.
Suppose that you are preparing to sell your property in the Happy Homes sub-division. Four to six months ago models like yours sold in the range of $650,000 to $675,000. There haven"t been any sales recently, but two similar models are on the market, both for about thirty days, in the low $700,000 range. This might lead you to think that if you put your home on for just under $700,000 you"ll be very competitive, right? Not necessarily.
Suppose also that there are other developments in the city, with homes of similar age and size, where the asking prices are hovering around $650,000. In that case, your home at $695,000 might not look so good after all. The point is, in some markets you may need to look beyond your immediate neighborhood.
I know, I know, I know. Your home is special; your neighborhood is unique; the other developments lack its cachet; etc. Sometimes all or some of those things are true. Other times, they are not. More to the point, even if they are true, they may not be sufficient to move buyers up another notch or two in what they are willing or able to pay.
When sellers are discussing pricing with their prospective listing agent, a good question to ask, or for the agent to pose, is, "If you (the agent) were working with a buyer in this approximate price range, looking for a home of this approximate size, what would you show him?" Often, answering that question may help both sellers and agents to broaden their thinking and to look beyond the particular neighborhood where the home is located. Just as a buyer would.
American home sellers don"t want to be like American automobile makers who for too long focused only on themselves and each other, and failed to pay attention to the foreign competition that American consumers were looking at -- and buying.