Breathe it in, folks. Autumn has officially arrived (even though here in Minnesota we’ve had the heatwave from hell for the past week). But today is one of those picture-perfect, cozy autumn days; the air is cool, there is a slight breeze, the sun peaks out every so often from behind gray clouds, and the leaves are turning brilliant shades of orange, yellow and red right before my eyes.
But the leaves aren’t the only things changing this time of year. With October comes the last push for the home sales. Behold, FALL MARKET HAS SPRUNG.
Unless you have been on another planet during the last few years, you know that we have seen significant events in the real estate world; first the pandemic where everyone thought that real estate as we know it would come to an end, only to be followed by insanely high home prices and sales like we had never seen before.
Then came 2023. At the start of the new year we were bombarded with troubling headlines such as “The Crash is Coming!” “The Housing Market Can’t Survive!” “Sell NOW or you will Miss your Chance!”
Guess what… there wasn’t a crash. In fact, home prices steadily rose throughout the first 3 quarters of 2023, despite a rise in interest rates. (Side note – DO NOT LISTEN TO THE MEDIA regarding real estate).
As we enter into the final quarter of the year, we are finally starting to see a slow-down. Don’t let that trouble you too much, however. We always see a slow down in the late summer, only to pick up one last time in October before the brakes are ferociously pumped as the holiday season approaches.
While we are still technically in a “seller’s market,” there is one serious factor that plays into whether you home will SIT or SELL this Fall, and that is MAKING SURE YOUR HOME IS PRICED RIGHT.
My team and I have sold hundreds of homes during our time in real estate. We always counsel our sellers as to what they have control over, and what they don’t when selling a home, and what they DO NOT have control over are Market Conditions and Neighborhood Competition. So it is absolutely imperative that we make sure their home not only is prepped and ready to sell, but that it is priced according to what the market is dictating if they want to make a sale in a reasonable amount of time.
Let me tell you a story…
This year, we have sold over a couple dozen properties. The sellers that listened to our advice (yes, we do this everyday, all day, so we sort of know what we are talking about) sold their homes in a matter of days, mostly at or above list price. Two sellers in particular however, turned to Zillow or advice from out of area realtors on how to price their home. Despite our urging to list their home at a competitive price, we are ethically bound to obey their wishes, so we priced their homes at the number where they decided they wanted to be.
Those are the only two listings of ours that are still sitting on the market, despite being beautiful and fully move-in-ready.
We get it. It is enticing to price your home a little higher than competing homes in your area to see if you can score with a full price (or even higher) offer.
So what happens to the homes that are priced over market value?
IT. JUST. WON’T. SELL.
Why?
1 – Your home will linger on the market.
Buyers are more educated than ever in this age of technology, as are (good) agents, and a buyer’s agent will 100% communicate to their buyers if they believe a home is priced too high. In many cases, a buyer will not even bother to view a home if they believe it is over-priced. Being that the first two weeks a home is on the market (in our current market anyway) is the best chance to get an offer, those lack of showings will cause it to sit, and when a home sits, the first thought that enters into a browsing buyer’s mind is, “This home has been on the market a long time, so there must be something wrong with it.”
2 – The appraisal won’t back you up.
Let’s say by some miracle you do get an at or above list price offer on your over-priced home. Yay! But wait… because most buyers need financing, that means they need to get an appraisal. So let’s say that your agent urged you to price at $350,000, but you decided to list at $380,000, and you receive a conventional, full price offer. Your buyer’s lender will need to order an appraisal. The appraiser determines that the home is only worth $350,000. At this point a couple of things can happen; the buyer can come up with cash to cover to value gap (very unlikely as very few people have an extra $30k laying around), or you need to lower the price to $350,000 as the bank will not lend the buyer more than what the appraisal dictated the home was worth. This can cause you to lose that buyer and your home will need to go back on the market.
3 – The home may sell for LESS than market value.
No, not less than you wanted, less than what your agent told you to price it at right from the start. Why? Because it has been on the market for too long, buyers see this and are wary, and when a buyer finally does come along, they assume you need to sell and will offer less than what it is worth. We’ve seen this happen a LOT.
Dear readers, I cannot stress this enough…
LISTEN TO YOUR REALTOR’S ADVICE!
Sure, not all agents are created equally, but those good ones who live, work and play in the communities where they are selling KNOW the market. They KNOW the activity. They KNOW how to price a home so that it sells.
If you are an agent like my teammates and I, we spend our days not only catering to our beloved clients, but we study the market inside and out. We analyze the competition and market statistics. We keep up on what buyers are doing and what type of buyer is buying which type of home.
PLEASE LISTEN TO US.
If you are in the market to sell your home in or around the Twin Cities, we’d be happy to come by and give you a free, no obligation market analysis.
The Fresh Agent 