You did your home selling research by watching numerous episodes of Love it or List it on HGTV. With 150 people a day moving to Austin, you felt like your house should sell quickly. (Heck, it can’t be that hard to sell a house, right? — HGTV makes the process look pretty easy.)
You asked friends for Realtor recommendations. You interviewed a few (not a dozen, but a few) of those Realtors and hired the one that you thought was best qualified. Per your Realtor’s suggestion, you de-cluttered, spruced up and staged your house. Your Realtor had professional photos taken and has high quality marketing materials.
You looked at the comparable market data with your Realtor and decided your house was worth more then the “comps” showed. Your reasoning was, “It’s a hot market! My house has high end paint, custom blinds and a new hot water heater.” You also heard a friend of a friend just received 5 offers on a house they recently listed in Austin. They must have priced it too low. Plus, you say, “I’m not in a hurry, I can wait”. The kiss of death sentence in real estate. Time kills deals and days on market hurt sales prices.
Now it’s been three months and you are starting to ask, “Why hasn’t my house sold in Austin’s ‘HOT’ real estate market?”.
Your list price may be too high.
Keep in mind, buyers with their Realtors are looking at the same market data as you and your Realtor. Buyers don’t mind paying a “premium” for a house when it’s their choice. For example, in a multiple offer situation, a buyer may choose to pay over list price. The market viewed the house as being priced correctly for the condition and location. Due to a shortage in correctly priced homes with a high volume of demand (buyers), it often produces a multiple offer situation. If that house had started with an overpriced list price, it probably would have sold for far less than what it ended up selling for due to the multiple offer situation.
“The demand for housing is so great that if the product is priced correctly and in a desirable location, it’s going to sell.”Vaike O’Grady, Austin regional director for MetroStudy
Buyers typically won’t purchase an overpriced house. Then you ask, “Well why doesn’t a buyer just send me a offer?”. Most buyers assume if the sellers haven’t reduced their price, they are not “motivated” to sell. Most buyers do not want to waste anyone’s time. In real estate, a key factor on sales price is the number of days on market. The less days on market the seller has when negotiating an offer, the more likely the seller is to end up with a contract at or near list price. If a house starts accumulating too many days on market, the more likely it is to sell for less then the original list price. Before a house becomes stagnant with too many days on market, it’s imperative to reduce the list price. If you have done everything you reasonably can to the condition of your house and it’s still not selling, it is time to reduce.
Pricing a house is an art — not always as simple and tangible as 1 + 1 = 2.
The Austin market will tell you soon enough how well you are priced. A few more indicators that you are overpriced:
- You have had 10 showings and no offers.
- You have gone an entire month with zero showings.
- The feedback you received from showings is that the list price is too high.
- Low online activity.
- You have received a few offers. None have worked out because the offers were “too low” for you.
- Other homes in your neighborhood are selling, but yours isn’t.
The Luxury Market — defined as homes over $1M in Austin — tends to take longer to sell then the current average of under 3 months for correctly priced homes. Makes sense, there are fewer buyers in the higher end price range. In the Luxury Market, it’s still important to price correctly but also important to be patient. As a luxury seller, one shouldn’t compare their property with the faster selling pace of an Austin median price home– which according to the Austin Board of Realtors for November 2018 was $301,391.
Luxury homes of $1 million or more typically take longer to sell. According to the 2017 Texas Luxury Home Sales Report by the Texas Association of Realtors, last year there was an inventory of 6.6 months for Austin homes priced in the seven figures — the highest inventory of any price class.
Most luxury homes can take over a year to sell.Austin Business Journal July 2018
Bottom line — If your house didn’t sell in 2018, you have done all the “sprucing/fixing” up you are going todo and you want to get it sold — best to reduce the list price! Your pocket book will thank you.