Pigs get fed and hogs get slaughtered. Not every home is going to attract viscous competition, even with historically low inventory. Buyers are willing to pay handsomely for renovated and well maintained homes, for homes in highly desirable settings, for high quality well-built homes and for homes that offer something unique that draws them. The idea that sellers can simply put a price on a home and buyers will jump isn’t reality. The media however, has sellers convinced it’s a “name your price” environment. It’s not. Sellers that accurately price their homes will do the best, not just with price but by controlling the transaction. Sink that hook deep, set the rules for the game and tilt the table. An accurately priced, well presented home will draw attention; overpriced sweat hogs....not so much.
The Data Doesn't Lie
Consider zip code 30075, the highly desirable Roswell area mainly west of Route 400 which includes “Downtown Roswell”. This chart reflects sale price as compared to list price; the dark blue bars are sales with no price change, the light blue bars are homes that had price reductions. The closest the two came was 1% in July 20; in May 21 properly priced homes sold at 99.5% of list, 5.5% HIGHER than those aspirationally priced. In May 21, accurately priced homes sold 9.7% HIGHER than those forced to reduce price. Accurately priced homes maxed at 102.45% (ABOVE LIST) and the worst was 98.28%.
A look at the north Fulton areas east of 400 (Alpharetta, Johns Creek, Duluth) shows the same trend. The closest the two came was 2.9% in March 21; in May 21 properly priced homes sold at 99.3% of list, 4.3% HIGHER than those aspirationally priced. The best sale to list price ratio for homes reduced was 98.44% and a low of 91.78%. Accurately priced homes maxed at 102.51% (ABOVE LIST) and the worst was 97.7%.
But Wait, There’s More!
Certainly “the bottom line” always boils down to price; sellers want as much possible. Great, but the deal has to close. Markets shift (they are ALWAYS in flux), sellers and agents must dig data and adjust to conditions at the time they're in the mix. Now (Jun 21), the Atlanta market is largely controlled by sellers. But that doesn’t translate to “name your price” – no matter what the national media says. Price homes accurately, the data above is incontrovertible. Be the home that draws multiple offers, make the buyers insane; that allows sellers to control some or most of the major aspects of the transaction:
- Pick best offer - make buyers compete
- Limit due diligence - maybe none and buy as is?
- Increase earnest money - sink the hook, grab 3%
- Limit appraisal exposure - limit any contribution or put it all on the buyer
- Control closing date - what works for the seller?
Task the listing agent to do a comprehensive market analysis; make the listing agent work. If needed, have an appraiser offer an independent opinion; that can be the best money spent as they have no vested interest in the sale. Work only with top producers and LISTEN to them, they are experts for a reason. Above all – look at those charts – there is NO BENEFIT to overpricing a home. Be accurate and let the market develop competition, sellers win when buyers get emotionally connected. Let that happen; be a pig, not a hog.
The Hank Miller Team puts 30+ years of full time sales & appraisal experience to work for you. Act with complete confidence & make sound, decisive real estate decisions. 678-428-8276 and firstname.lastname@example.org
A word about the data - this is a snapshot of the greater Atlanta market. Data can be easily manipulated to support whatever argument is presented, especially real estate data. This post is also supported by anecdotal evidence; that I've had as well as many agents that I deal with daily. Every micro market is different, but the most reliable observations and conclusions come when more than one source supports an idea. That accurately priced homes result in the best overall experience for a home seller is a consistent, no matter the market.Posted by Hank Miller on