Did you ever wonder why some listings go into contract in the first week, while others sit on the market for half a year?
It’s not pure luck – homes don’t sell by accident. Instead, it is the result of a smart marketing strategy devised by an experienced real estate agent.
Here’s an example of a strategy that works …
A few weeks ago I listed a newer home located in Lewis Center (see pictures below). This house sits on a corner lot across the street from an elementary school.
When I published this listing, I received more than 10 showing requests on the first day. Within a week we had multiple offers, and my seller was able to select the best one.
How did we get a contract or more in less than a week?
Implement A Strategy that Yields Offers
The location and quality of a home are important components of any strategy. But when it comes to getting offers on your listing, you must get qualified buyers into the house – the more the better! If no one looks at your listing, you can’t get an offer.
The best way to generate immediate interest in a new listing is pricing it right.
My seller’s subdivision had quite a few listings on the market. On first view they all look very similar. Most were priced around $240K and have been sitting on the market for more than 6 months.
Not a good prospect, if you want to sell your house quickly and have to deal with lots of competition. But nevertheless, with the right strategies in place, you too can have your house in contract in just a week.
The Correct List Price will Move Your Home
After I did a market analysis for this specific neighborhood, I noticed that during the past 6 months homes sold for less than $220K.
I recommended to my buyer to list his house just below the average price of recent home sales. It was 10% below the list price of our competition.
You may feel that sellers are selling themselves short by listing their house below its current market value.
That’s really not the case. As you will see, it makes a lot of sense to start low.
- Your listing will stand out. A low list price will attract attention, more buyers and agents will notice it, and schedule showings. Remember, the key to selling homes quickly is to get as many potential buyers into the house as possible.
- You will receive multiple offers. Most offers will be just below the list price. Experienced buyers agents, will recognize that it is a great deal and suggest their buyers submit higher offers.
- Your agent can request a best and final offer. With multiple offers on the table, your Realtor can go back to each buyer and generate a “bidding war”. This will ultimately result in a qualified offer at or above the list price, probably without a request for seller concessions.
- You will sell quickly with the right contract. If you sell your home quickly, say within one month instead of six, you will save thousands of dollars in mortgage payments.
Why the Seller Wins
While homes for sale in this subdivision have been sitting on the market for 6 months, the individual home owners had to make an extra 6 mortgage payments. By contrast, my seller can close within 45 days of listing the property, and only make one extra payment.
The typical mortgage payment on a $220,000 loan is around $2,000 per month. This means that you lose approximately 1% of its value every month. If your house does not move for 10 months you lost 10% of its value due to additional mortgage payments.
When you finally get an offer, it will be much lower than your asking price. You will be desperate, take the low offer just to get the home sold, and maybe even make further concessions to the buyers.
In this subdivision, the typical $240K listing generated offers in the $220K range. However, sellers had to wait for 10 months or more to get these offers. They easily paid $20K in additional mortgage payments, while their home didn’t sell for more than its “real” market value (of $220K.)
What’s the Trick to get in Contract?
The trick to selling your house quickly is pricing it below its retail value. This will generate a lot of traffic and multiple offers. There will be a small bidding war and you will get exactly what you are asking for the house.
There’s one more benefit to this strategy. If you have multiple offers, and your first choice does not close or does not get their loan approved, you can use the others as a backup.
That’s exactly what happened with my listing. The first buyer could not get their loan approved. As soon as they cancelled, I called my 2 backup bidders, and we had the home in contract once again within 24 hours.
Why Doesn’t Everyone Use This Strategy?
The reason why most sellers don’t employ this strategy is simple. They want to try listing it for the higher price in hopes that they get lucky and someone will submit a high offer.
Unfortunately, that’s usually not happening. And your house will sit on the market for a long time.
The other reason why this strategy is not used by most agents is that they don’t have the “guts” to tell the sellers the truth. Instead they tell the home owner what he/she likes to hear.
If you need help pricing your home for sale correctly, call me at (614) 975-9650!
I will give you a straight answer on the real value of your home and show you how to sell it quickly!