Apr 21, 2011
NEWSFLASH: There Is NO Inventory!!!
Courtesty KCM Blog
I was in a conversation with one of the most productive agents in our area recently and he told me that there were “no homes for him to sell”. I thought he had a brain cramp. Look at all the ‘For Sale’ signs, all the homes on MLS, all the short sales and foreclosures plus all the shadow inventory on its way. Had this respected agent lost his mind?
As he saw the puzzled expression on my face (which was his intent), he began to explain that every home that is priced correctly is being gobbled up by buyers right away. The only homes that remain on the market for more than 30 days are the ones where the price doesn’t COMPEL a buyer (even multiple buyers) to make an offer.
I pondered his assertion for a while and his premise began to make more and more sense because I am witnessing:
- Increased attendance at Open Houses. Buyers are coming out to look because they know now is the time to buy(great interest rates with higher rates around the bend, huge inventory available, etc.)
- Realistic sellers (in terms of asking price) are getting significantly more traffic. This results in an increase in interested buyers; more interested buyers push prices higher. By adjusting prices, many sellers are getting higher offers. By remaining overpriced (and hoping to negotiate down), other sellers are seeing no traffic and no offers.
Why are there record numbers of homes on the market when the properly priced homes are being gobbled up (some at even higher than the listing price)? Because there is a huge difference between a home ‘being on the market’ and a home that is seriously ‘for sale’. Sellers who are serious about selling are aggressive with pricing because that is how you gain the highest price. A little counter-intuitive maybe; but, it’s very true.
Pricing is the centerpiece of your real estate agents marketing plan (although not the only component). The marketing plan should be designed to drive as many qualified buyers to see your home because THAT is the single most important factor in getting the most money – the number of people bidding. My advice is to give yourself the best chance for highest bids by pricing the home at a compelling number.
Make it a great day Trian