In a transitional market one thing is certain – nothing is certain.
For a few years now the real estate market has been completely robust despite everything. We have been through a long drawn out pandemic, and still you could sell a cardboard box if the location📍 was right. Now, things are a little different. Not completely different, but just different enough that you need to temper your enthusiastic desire to get the same price your neighbor got six months ago, and realize the pressure of the Ukrainian war, supply chain problems, inflation, the stock market being highly volatile, and interest rates ticking upwards are going to make us nostalgic about the euphoric sales prices at the beginning of the year.
At the beginning of a transitional market (I have been through three of them), the disconnect between buyers and sellers on pricing is challenging.
- Houses that three months ago would have gotten 10 offers are suddenly getting only three.
- Houses that are not remodeled, in a good location and priced well may sit for much longer.
All of this is normal, but it doesn't make it feel any better. Also, it is not your realtor's fault. They are just as stymied as you are that the bull market is seeming to disappear before their eyes. They have gotten used to pricing things very low and having them pop up to the stratosphere. In this sort of a market pricing is absolutely key- and putting a house that is worth 1.2 on the market for 899 is not a good idea. It may not reach the people who would actually pay you that for it, and will create resentment amongst buyers. Buyer reticence in this sort of a market is almost legendary, and so doing things to entice buyers to your property is going to be key.
Hiring the right realtor!
You also need to think about hiring a realtor who understands market changes and knows how to navigate them. In this kind of market, standing out from the crowd, pricing well, and being flexible are key things. Your marketing needs to be a choice (this is always the case), but having a realistic idea of the value of your property is key.
I recently had a house on the market that I told the sellers would sell in the range of 1.5-1.8. We ultimately received 3 offers, and two of them were 1.8. The other offer was 1.5. The sellers had somehow gotten it into their heads that the place would sell for 2 million- why? because their neighbor's house (bigger with a complete bay view) had sold for that. 🥴 This is why looking at comparable sales that are true comparables is very important.
Pricing carefully- not so low that you don't attract the right buyers, and not so high that people think you are arrogant is key. It is a subtle game that requires strategic thinking, as well as wisdom. Don't be fooled by baby start up companies purveying "savings" through lower commissions or rebates.