Proper Pricing is Key to Selling.

Anybody who has ever found themselves trying to sell a home invariably struggles with the question “What price should I set on my home?” While normally this is an important decision for a homeowner to make, today it is one of the most critical decisions in order to sell a home. The Metro Milwaukee real estate market appears to be similar to most real estate markets around the country. There is a huge inventory of homes and buyer activity has dropped off from years past.

Supply And Demand Dictate Home Values
We must never forget that real estate is a commodity and as such the laws of economics apply. Many of us think of our home as a unique place on this world, and while we are living there, it really is. But once we decide to sell it, our home becomes a house, a commodity that must be sold or traded in a market filled with competition. When supply outpaces demand, values fall. When demand exceeds supply, prices rise. We typically see a balanced market when inventory is 5-6 months. Anything less than that is a sellers’ market, and of course greater is a buyers’ market.

With about 11 months of supply of homes (was 3-4 months in 2004), we are clearly in a buyers’ market. The inventory has been very slowly coming down in the last few months with some sellers taking their home off the market until conditions improve and the $8,000 buyer credit contributing to the small decline.

Avoid The Biggest Mistake That Home Sellers Make
The biggest mistake I see from people who want to sell a home comes in both good and bad markets. They price their home too high (because they do not want to “leave anything on the table”). While this appears to make sense, it actually works against them as studies have found that the “freshest” homes on the market sell for a higher amount.

In an upwards moving market, a home that is priced too high will eventually sell when the market “catches up” with the higher value the seller demands. On the other hand in a declining market of the past couple of years, a higher price makes the home completely unsaleable as prices for comparable homes keep dropping.

Chasing The Market Is The Biggest Mistake A Seller Can Make
We refer to the actions of a seller who prices the home too high in a declining market as “chasing the market.” In this type of market as prices erode this seller has to keep reducing but never enough to undercut the competition (similarly priced homes which are SELLING) are bigger or nicer. What is truly tragic for this seller is that the home, in order to sell, has to get to a price much lower than it would have sold for, at the start of the marketing period.

How To Price A Home To Sell
This is a tough real estate market and roughly only half the homes that are offered for sale are going to sell over the next 12 months (based on data from the last 12 months)! If you do not need to sell your home, help everybody out (including yourself) and take your home off the market. But if you do need to sell, work with a real estate company such as Homeowners Concept that has real estate Professionals with vast knowledge in proper pricing, staging, negotiations, closing and offers extensive marketing. This is critical. Pricing your home correctly at the start, plus marketing it in key distribution channels will allow you to be part of the 1 in 2 happy home sellers that actually sell their home. Of course saving thousands off a 6% commission is nice too.