Apart from the obvious factors (e.g., homes in very high price ranges have fewer buyers than $300,000 homes), a word about economic reality is in order. We have all been taught that the real equation in real estate is "location, location, location." This is utterly false. People actually live in Kansas!
The real equation in real estate is price vs. condition. If your home is marketed effectively, (i.e., at least two dozen showings, and it's in the best possible showing condition) you should get a favorable response in 1 to 3 weeks. By "favorable" I mean second showings, requests for additional information, or an actual offer.
Unfortunately, most homeowners have been brainwashed into thinking that to get the price they want, they must list their property for 10-15% above it's actual market value. While in actuality, they are actually hurting their chances of getting what their home is worth.
Think about it for a second. Most buyers are actually using an agent to find that "perfect property". Any agent doing business, for any amount of time, has a very accurate knowledge of home values for each particular area and community. What is the first step in that Buyer getting to your home for exposure? Their agent looking through the MLS and finding your property in the search results, is the first step. Most agents, when they see a home that is 10-15% overpriced or more, alongside 7 or 8 others with comparable features, won't even set up the showing.
After weeks and weeks, with no bites or offers on your property, you have to make a price reduction to get it back to it's true market value. Now, because the home was overpriced to begin with, this price change will seem pretty drastic to any agent looking through the MLS, for their clients. At this point, the only offers you will probably receive are going to be lower than your new reduced price. It's all about mindset. The Buyer sees a drastic price reduction, several weeks or months on the market, and they think, "They NEED to sell. They'll take less."
To effectively market your property, you must have an accurate Comparative Market Analysis done for the area, and it must be given enough time on the market to bring the correct price. If your home sells in 5 - 10 days, it's usually selling too cheap. There IS a buyer for every home. You just have to give it adequate time for the market to bring the two together.
If you have not received a favorable response to your showings, there is only one part of the equation that can be changed: your price must be lowered. You can either face this fact now, or deal with it much later, after months of being on the market. Run a second Comparative Market Analysis because, yes, the market in certain areas does,and will, change.
And one more key point to remember when deciding your homes value and marketing. Tax Value or Assessed Value means nothing! This is just a value the tax department assesses on your property to determine how much you'll pay them in taxes. It's almost always too high.
Also, If you've had your home refinanced, 8 times out of 10, it's too high. Why? Because appraisers for a refinance are not held accountable, while appraisers at initial purchase are. That's why you may hear some stories about the appraisal "not coming in" before close of an initial purchase transaction. Refinance appraisers work for the lender. Don't let a refinance appraisal influence your calculation of actual market value of your home.
So what does all this teach us? Price it right the first time. Allow enough market time to get true market value for your home. You'll save yourself alot of time and frustration.
The following chart is a national market average.
Sold within: Percentage of Homes
1 Month 40%
2 Months 7%
3 Months 7%
4 Months 20%
5 Months 10%
6 Months 7%
7 Months 9%
If your property isn't sold within 30 days, a price adjustment should be made!
Statistics are based on National average of homes sold.