Another example of the difference 5 or 6 years makes. Back in the booming 2005 or 2006 real estate market, the buyer was somewhat at the mercy of the seller.
The dining room negotiating table was definitely tilted in the favour of the seller.
A sample conversation went something like this:
REALTOR: “The market value of your home is in the $225 to 232,000 range”.
SELLER: “Ok. That sounds good to us. Can we try listing it in the $244,000 range?”
REALTOR: “Sure, we’ll see how the first few weeks go but we would expect offers in the near future”.
…and largely, that approach worked 6 or 7 years ago.
The seller that goes down that road in today’s market is in for a tougher battle. It doesn’t mean their home won’t sell but the market, and buyer, is much more price sensitive. That extra 5 or 7,000 over market can be the difference between selling in a few weeks and selling several months (or more) down the road.
Why is that? Some of the negotiating and market leverage has flipped back to the buyer, largely due to supply and demand factors. Also, to some extent, buyer fatigue from getting beaten up for so long by the sellers. Now that the buyer has reclaimed some control at the table, they have in general held onto it with both hands.
So, that brings us to the $5,000 difference.
If you have a home that is getting showings, enquiries, interest and great feedback but no offers, that likely means one thing. Buyers are finding a reason to say “let’s keep looking” or “we’ll think about it” or “we like it, but…”
As mentioned, we are in a more price sensitive market than a lot of people care to believe. If your home is priced at $255,000 but all indications are that it should be closer to $246 or 248, re-listing your home at $249,900 may likely be enough to get these fence-sitting buyers off the fence and at the offer table. And when the offers actually come in, you may be surprised to find they are now at or close to asking, equivalent to what you would have been quite happy with back with the old listing price.
The reason for the response? Quite likely, it was adjusting the price to be at or close to market value. When that happens, a buyer can, with justification, get to the point of an offer before losing out. Until there is demand and the chance of loss, the fear of loss won’t be a significant emotion. It should be clear that the “price it at market value + 10%” is a dangerous trail to venture down.
There are ways to get to that fair market value. The trick is discovering that the route there has changed.
To discuss your home, feel free to contact us for a pressure free discussion.
Thank-you for visiting.
Thanks to Sven Mieke for the photo