The last thing you want to do when selling a property is leave money on the table, right? So, you decide to price it high.
A lot of sellers assume that buyers like to negotiate, so they overprice their properties. The truth is, buyers don’t negotiate as much as one would think.
And get this—if you price your home too high, there’s a good chance it’ll sit on the market for 30+ days with zero offers. At that point, you will have no choice but to reduce your price. So now, you’re sitting on a property that’s been on the market for longer than a month. Potential buyers will indubitably ask themselves, “There’s gotta be something wrong with this place. Why hasn’t anyone purchased it yet?” Then, you’ll have an even tougher time convincing anyone that the property is in great condition.
This scenario outlines the importance of accurate pricing. When you get it right the first time, you don’t leave any money on the table and your property sells within a reasonable timeframe. We pulled data from the First Multiple Listing Service to get a feel for how sellers are doing when it came to pricing.
To sum it up? They could be more strategic.
[Before you read on, here’s a quick breakdown on the difference between “days on market” and “cumulative days on market” — Days on market represents the amount of time a particular listing has been active before it sells. Cumulative days on market represents the total amount of time it takes a property to sell, combining all of its listings. This accounts for failed sales and having to relist the property after the original listing expires, among other things.]
Sellers in Alpharetta are facing the most room for improvement as it pertains to pricing strategies. Those who transacted last year originally asked for a median of $399,000. They ultimately received 19.0% less, as the median sale price in the city came out to $323,000.
As far as concessions go, Alpharetta sellers didn’t have to shell out as much as some others. They gave an average of $2,280 in concessions to their buyers in 2016. However, the lengthy days on market confirms that these sellers could have done slightly better in regards to pricing. For most recent listing that resulted in a sale, properties were on the market for an average of 38 days. Meantime, cumulative time on market was 54 days.
Check this case out.
Atlanta sellers fared slightly better in terms of pricing, receiving 12.2% less than the originally listed for a median of $284,900.
Concessions and days on market, however were among the highest we analyzed for this report. Last year, sellers in Atlanta paid an average of $2,948 to their buyers. And it took homeowners an average of 46 days to sell their properties—resulting in a total of 57 days on market.
Look at this example.
Chamblee is being lauded as one of the hottest real-estate spots in Metro Atlanta, and that becomes clear when we look at pricing and days on market. The original median listing price in Chamblee last year was $314,950, and sellers received a median of 7.9% less at $290,000.
It took sellers slightly under one month—26 days—to sell their homes on their most recent listings, which is not bad at all.
Still, there’s room for improvement. Check out this case study.
In Cumming, last year’s sellers received $299,950, which was 11.9% less than the original median price they listed.
When it came to concessions, these homeowners had to shell out a significant amount to their buyers. The average concession came out to $2,761.
Sellers in Cumming were faced with the longest days on market. On their last active listing, it took them a staggering 53 days to sell their homes. In total, it took them 68 days. This indicates that sellers in Cumming might have dealt with an onslaught of failed sales in 2016.
Here is one example.
Sellers in Duluth received 12.6% less than the median of $269,000 they originally listed in 2016. They didn’t have to pay as much in concessions as some of their neighbors, shelling out an average of $2,076.
The days it took to sell a home, however, tells us that these sellers could have been more strategic in terms of pricing. It took Duluth homeowners an average of 44 days to receive offers on their last active listing. As for cumulative days on market, they waited an average of 56 days.
Check this one out.
At $440,000, the median price Dunwoody sellers originally asked for was higher than any of the other cities we analyzed. They ended up bringing in 9.1% less. Concessions were on the higher side, as sellers gave up an average of $2,854 to their buyers.
Still, it took them an average of 39 days to sell their properties on their last active listing. In total, these sellers waited an average of 50 days to get their houses off the market.
Check out this case.
Kennesaw sellers received 10.4% less than the median of $240,000 they originally listed. As for concessions, they shelled out $2,544 to their buyers.
The length of time on the market tells us that had these sellers priced strategically the first time around, they might have been able to close sooner and have gotten a higher percentage of their asking price. It took sellers in Kennesaw 41 days to sell their properties on the most recent listing, and 51 cumulative days.
Look at this case study.
Mableton sellers who transacted last year received $242,756, which was 6.1% less than the original listing median of $258,450. That 6.1% doesn’t seem too far off, but it’s a completely different story when it came to concessions. At an average of $3,052, Mableton sellers paid more in concessions than sellers in any other city we analyzed.
It took properties an average of 43 days to sell on their most recent listing and 52 days cumulative. That’s a lengthy amount of time that led to many price reductions on the market.
Take a look at this one.
Sellers in Marietta are quite off base in regards to pricing. In 2016, they originally asked for a median price of $299,900. They made 15.1% less, with a median of $254,475. They gave up a significant amount in concessions as well, with $2,649 on average.
With their most recent listings, Marietta sellers waited an average of 42 days for their properties to sell. Cumulatively, they waited 54 days.
Take a look at how this impacted one particular seller.
Smyrna is in high demand right now, which gives us reason to believe sellers could be doing better. They asked for a median of $289,000 and received 7.8% less. Concessions were high at an average of $2,921.
And days on market were significant as well. It took these homeowners 42 days to receive an offer after posting their most recent listing, and it took an average of 51 days total for them to sell their properties.
Check out this case.
The price should be right … the first time around
A significant portion of sellers have trouble getting their listing price right. 46% of first-time sellers change their list price at least twice, according to research from Zillow.
Oftentimes, agents suggest inflated list prices to homeowners to win over listings. Unfortunately, they aren’t accountable if the seller has to reduce their price multiple times. If a house takes months longer to sell and for $20,000 less because it was overpriced, the sellers is out $20,000 and lots of time. To learn how Knock relies on data science, a 200-point inspection and market knowledge to price homes accurately – read up on our strategy.