Thinking About Selling? Here’s What You Need to Know Right Now

Remember a few years ago? Selling a home felt effortless. Properties were snapped up, often with multiple bids far exceeding the asking price. It seemed like sellers held all the cards.

Fast forward to today, and the landscape has shifted. The housing market is evolving. With increased inventory, buyers are becoming more discerning, homes are spending more time on the market, and price adjustments are becoming increasingly common for sellers.

So, how do you navigate this new environment and achieve a successful sale? It boils down to one critical factor: establishing the correct asking price from the outset. In today's market, this isn't just important—it's absolutely essential for a successful transaction.

Bridging the Expectation Gap Between Sellers and Buyers

There's a noticeable disconnect between what many sellers anticipate and what buyers are currently prepared to offer. Recent data from Realtor.com indicates that a significant majority of home sellers (81%) expect to receive their asking price or even more. However, a closer look at actual sales figures reveals a widening gap between these expectations and the reality of buyer willingness to pay.

The National Association of Realtors (NAR) annual report underscores this, showing that 44% of recent home sales closed for less than the initial asking price. Furthermore, a third of sellers found themselves needing to reduce their price at least once before their property sold. This suggests that seller expectations may need to realign with current market conditions.

Consider the trend illustrated in the graph below, which utilizes Redfin data. The blue line, representing asking prices, consistently stands higher than the green line, which depicts actual sales prices. This divergence is becoming more pronounced:

This visual representation conveys a vital message: current buyer willingness to pay doesn't always align with seller asking prices. This isn't to say you can't achieve an excellent sale price, but it strongly emphasizes the need to initiate your listing with a price that accurately reflects what buyers are genuinely prepared to pay in the current market.

The Pitfalls of Overpricing Your Property

Initially, setting a higher price might seem like a clever strategy to build in negotiation room. However, an overly ambitious price can have the opposite effect, causing your home to languish on the market and deterring potential buyers.

Today's buyers are savvy. When they see a property that has been listed for an extended period, it raises questions and often leads to assumptions that something might be amiss. This can result in fewer showings, diminished interest, and ultimately, a necessary price reduction to re-capture attention. As Realtor.com aptly points out:

"By establishing the right price early on, you enhance the likelihood of attracting buyer interest. This, in turn, minimizes the time your home spends on the market and reduces the chance you'll need to lower the listing price."

The longer a home remains on the market, the more challenging it can become to sell.

Your Opportunity Remains Strong – With the Right Price

To avoid the common mistake of overpricing, it is crucial to collaborate with a real estate professional who possesses a deep understanding of your local market dynamics.

Your agent will meticulously analyze recent local sales data, current buyer trends, and inventory levels to pinpoint the ideal pricing sweet spot for your specific neighborhood. This "sweet spot" will vary significantly depending on your location.

It's also worth remembering that home values have appreciated significantly—more than 57% over the past five years. Therefore, even if your ultimate selling price is slightly below your initial highest hopes, you are still likely to be in a very favorable financial position.

With the expert guidance of a local real estate agent, you can significantly boost your home's visibility, prevent it from sitting idle on the market, and maximize your chances of receiving a compelling offer.

In the current market, strategic pricing is the key to success. As Mike Simonsen, Founder of Altos Research, explains:

". . . the best properties, well priced are selling quickly in most of the country."

The Bottom Line

While the market has evolved, your opportunity to sell your home has not diminished. What has changed is the necessity for a well-thought-out pricing strategy. Let's discuss the current pricing trends in our local area and determine the optimal price that will help your house sell efficiently and for the best possible value.