It needs the home seller to stop thinking like a seller and start behaving like a buyer when learning how to sell a home in any market , particularly a down market. I know it can be tough because when they sell they have certain expectations , needs and wills. But the truth is a consumer really doesn’t matter what they expect, need or want.
In any case, price and location are crucial to selling a home in any market. Let’s say Jack and Diane are looking to purchase a home. We’ll say as of today they’ve looked at 37 properties in their target area with a price range between $250,000 and $300,000, giving or taking.Checkout buyers in Birmingham for more info.
Some of the homes have been very nice as expected and some, well, not so good.
Only by chance would one property be the best out of the 37 homes; one would be the worst and the remaining 35 would be somewhere between second and thirty-sixth.
Are you still with me? Ok, fine. Now, just for illustration purposes let me exaggerate here.
Let’s pretend that one home looked at by Jack and Diane was just a single dollar; yes, just a single dollar. We’ll pretend the house needs some work as well, but mostly it’s cosmetic. Well, no doubt this home is the best placed on the market, even though it was in the worst condition of all 37.
So Jack and Diane give a one dollar full price offer, the offer is accepted, and they now have a beautiful new home, fully paid for, in a neighborhood of homes priced around $250,000-$300,000.
I know that’s an exaggeration so let’s keep going.
What if a thousand dollars were priced at the one dollar home; a thousand times more than a dollar? Exactly correct, the house must have been purchased by Jack and Diane.
How if the price for the home was $100,000? In a neighborhood of $250,000-$300,000 you can bet that they would be getting full price in a split second.
Sure, I’m not going to agree that a normal home seller wouldn’t sell their home for that low. But still, the mechanism is the same.
What if the price for the home was $200,000? While not as good as the one dollar contract, it still falls below neighborhood values.
If the one dollar house is priced at $250,000 then all bets will be off. Of the other thirty seven homes there, it could very well be a better positioned home.
Maybe Jack and Diane thought another home priced at $260,000 was better positioned (even if it’s priced higher) because no cosmetic work was needed at all. All as it is is fine.
The point is, when a buyer looks at a home they are just going to make an offer on the house they believe is the best placed in contrast with all the other homes they’ve seen.