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Property sellers should read up on the many ways they can sabotage the sale of their home. The same mistakes are made by so many sellers that the same issues surface in article after article on the subject.
A key factor that I find is not on enough lists is timing.
Most important, and perhaps most obvious, is when to put a property on the market. However, every market is different, and every market changes a bit each year, so there is no single “ideal” month to offer your home for sale. Sure, over time, each market has its periods of significant activity — often summer months — and lower activity, but a sharp listing broker will have a more precise timing strategy to recommend.
Timing your offer for sale generally has three goals: securing the most showings, landing the most offers and earning the appraised value you need. Considering the appraisal process often is forgotten in the decision-making process.
All appraisers get a copy of your executed sales contract and will look at several months of comparable sales, though it seems most prefer to stay within the last four months. Think about the pricing and market activity your area will have experienced in that time period. Will enough similar properties have sold within that window to generate enough data to support the appraisal you need, and will it be at prices that back up your price? List in March, get an offer in April and the comparable properties used in your appraisal may be from December. That might be a good thing in your market, or maybe not. Are people discounting their December or January sales or getting top dollar?
If your appraisal comes in well below your agreed-upon price, many buyers will panic and back out of the sale. The buyer and their agent know that if you refuse to accept their price, even if it is below the appraised amount, then you must put the house back on the market with three issues. First, the property now has a stigma attached. Future buyers and their agents will wonder and ask if it was because of inspection or appraisal issues. Second, your days on market are going to stretch out even further, which can make potential buyers wonder if there is a problem and then put your home lower on their list. And third, you have no guarantee that your second appraisal — assuming you can get a second buyer — will be as high as the first one. So, many sellers feel pressured to go ahead and accept the first buyer’s renegotiated offer even if it is below the original contract price and below the appraised value.
Three other timing questions that quickly come into play after you have placed your home on the market are when to make pricing changes, when does the number of days on the market accumulate to where it creates a problem and when do you address issues with your property that were pointed out in feedback from initial showings?
Your initial asking price is a balance between trying to get the highest reasonable price the property is likely to appraise and finding a price low enough to make your pool of potential buyers as large as possible.
Often the first weekend on the market can be very telling and helpful in determining timing for a pricing adjustment. If you and your agent are pleased with the number of showings, even if you didn’t receive the number of offers you wanted, and the feedback on the property is good, you may decide to leave the price and condition the same through a second weekend. If not, it is time to decide on changes to price and/or on things you should change about the property, such as paint or flooring or staging.
When the response from the marketplace is the property needs work or that the price is too high, too often sellers are too slow to make changes. Sellers should remember that an amazing number of people do not seem to be able to visualize the property on their own as it would look with improvements, and it is nearly impossible to lure a potential buyer back to a home once they have rejected it. Sellers who hesitate on price changes or fixes lose valuable days on the market.
In many markets, brokers find “starter” houses should be under contract fairly quickly, or the price or condition needs to be addressed. Higher-priced properties have a smaller pool of potential buyers and thus stay on the market longer. However, more than 45 to 60 days on the market can be hard to overcome unless you have made significant price drops, depending on the specific market. If your property is the likely target for a move-up buyer, giving the buyer time to sell their own home first might be part of your timing calculation. That type of buyer might first need to be sure they are getting enough out of the sale of their property to be able to afford the payment on yours. Local agents should know the range in advance to be able to guide the seller.
Too often sellers hire an expert advisor, as they should, for something as complex and important as marketing one’s property for sale yet fail to act on the advice of that expert and, thus, sabotage their own sale. When working with a listing broker, pay special attention to timing as a critical category of expertise to follow. Timing isn’t everything when selling real estate, but it is one of the most critical strategies when trying for a speedy sale at the highest price.