Hello Chippewa Valley, Wisconsin and WORLD! I’m typing from the frozen tundra of Menomonie, Wisconsin and this will serve as my first blog post ever. I’m excited to share weekly Real Estate knowledge with you.
This week’s blog post is a guide to determining if you priced your residential home correctly or not. Just so we are all clear, there are three standard measurements of a home’s value: the Tax Assessment, an Appraisal, and the Fair Market Value. I will focus on the Fair Market Value which is what a Ready, Willing, and Able Buyer will pay for your home in today’s current market. Funny enough, this number is not any one number at all, it’s actually a range, say from $200,000 to $220,000, not $206,750. Sometimes determining where to price a home in that range can be tricky, especially if not many comparable properties have sold recently. So, we Real Estate Professionals will often have to give our best S.W.A.G. or Sophisticated Wild Ass Guess. Most of the time, agents and sellers get it right or darn close. I’m sure we’ve all seen those homes that need a few price drops to get sold though. In that case, it doesn’t mean that anyone did anything wrong, inherently. The market is always changing, and when trying to get the very top dollar for a home it’s very easy to be off as little as 1-5%. A price adjustment will usually do the trick!
In a balanced market, homes take 180 days to sell, and we definitely aren’t experiencing that right now. The average DOM (Days on Market) for residential homes in Eau Claire, Wisconsin in 2019 so far is 40 days (Pulled directly from Realtors Association of Northwest Wisconsin 06 March 19).
I’m going to discuss pricing a home in today’s Seller’s market, where you can typically determine where you priced your home within the first month. Also worth noting, luxury homes, which in the Eau Claire area are roughly $400,000 and over, will fall into a different timeline than the one I will be discussing! So, without further ado, here is the definitive guide to determining where you have priced your home:
Under Priced: You’ll know it right away. If you list your home, regardless of what day of the week it is, and receive 5+ showings on the first day, multiple offers over asking price, and agents beating down the doors to get their buyers into your charming home… Guess what? You probably under priced it. This sounds like a bad thing, but it may not always be. Yes, grossly under pricing your home isn’t good, but slightly under pricing it can reap huge rewards. The market will determine what your home is worth, so if you under price it slightly, competing offers will bid your sales price up to what the highest and best Buyer is willing to offer. This can lead to you having multiple strong offers to choose from and can help you sell your home quickly to a very strong, low maintenance Buyer.
Priced Perfectly: This, obviously, is ideal. If you list your home and a week goes by with 5-10 showings, fantastic feedback on your lovely home and cute updates, and you receive an asking priced offer at the end of the week from a solid Buyer… Congratulations, you are the wisest wizard and priced your home perfectly. Accept that offer, smugly pat yourself on the back, and reward yourself with something caloric!
Slightly Overpriced: This one can be the hardest to determine because people in the upper Midwest can be polite to a fault. For example, in the first two to three weeks, you may receive 5-10 showings, but no offers. Most people aren’t going to tell you that it’s too much money. They’re going to leave feedback saying they “liked the home, but still looking” or “great home, priced perfect, Buyer thinking about it”. TRANSLATION: that’s Wisconsin Nice for, “Great home, we liked the pictures online, but when we got there it was a little more that what we want to spend on this home.” Often times a slight price adjustment can solicit a great offer and you can repeat the above steps: accept great offer, pat on back, celebratory calories.
Overpriced: This one is easy to determine by listening to the deafening silence when you list your home. Few showings. Feedback stating that it is indeed overpriced. Few views on websites and the MLS. A significant price drop is usually what the doctor will order. Don’t worry though, every home sells for the right price!
I hope you all found this informative and helpful. There are many factors beyond price that go into selling a home, but these are some tried and true rules of the thumb. If you or someone you know is considering selling a home, I’d love to talk. Please contact me at 715-529-0239 or firstname.lastname@example.org.
See you next week – Make Moves Happen!
Tim, RE/MAX Affiliates