Updated 5/28/16
Takeaways
- The longer on the market, the bigger the discount a home sells for.
- The listing price should be close to the fair market value to maximize your experience and profit
“My home sold in two weeks. Does that mean it was underpriced?”
No. It probably means you did great.
Homes are like fresh bread. The moment you put it on the market, it slowly starts to turn stale.
The Buyer’s Point of View
Imagine you are the buyer. Homes that have been on the market a long time clearly can’t be great deals or someone would have scooped them up already, right? They buyer is thinking that maybe there is something wrong with the home. And if the home has been around three months, already, what is the hurt in waiting a few days before making an offer?
A home lingering around on the market is the #1 way to lose value. That is why I’ve said previously that the goal is often to sell quickly, while your home is still hot and just out of the oven. Everyone wants a bite of that!
What Does the Data Say About The Fort Hood Area?
Let’s look at some Fort Hood area numbers below. The first chart shows how much the seller got as a percentage of the original list price (Sales Price / Original List Price), grouped by the number of days on market.
Homes that found a buyer in two weeks sold for 99.3% of the original asking price. Just one week later, and there is a 1.1% drop. That is potentially $1000s lost just because the home was on the market three weeks instead of two.
Note that days on market measures when the house goes under contract with a buyer, not when it actually closes (usually 4-6 weeks from that date).
What does that mean in real dollars? The graph below translates that into dollars, based on a $200,000 home.
No surprises. The longer a home takes to sell, the steeper the discount it ultimately sells for. And that discount can be $10,000+.
Chicken or Egg?
Is your home price dropping because it’s on the market too long? Or is it on the market too long because your home price was too high to begin with? I don’t know. Probably both. Either way, what this graph reinforces to me is the benefit of listing close to a fair market value for your home.
How long your home is on the market should not by itself drive all decisions as to how well marketed or priced it is. High end homes are on the market longer. A $250,000 home with a pool that has been well priced on the market three months would not necessarily concern me as an agent by itself.
This graph is helpful for buyers as well. A seller may not want to discount their asking price too much if the home has only been on the market a week.
1 Month Listing Agreement
37% of Fort Hood homes that sell go under contract in the first month. There is no reason your home can’t be one of them.
I personally offer a 1 Month Listing Agreement, instead of typical 6 month listing agreements. A well marketed home that meets the PACE principles that I lay out in my Ultimate Fort Hood Seller Guide should find a buyer in one month in the Fort Hood market. If you or someone you know is considering selling their home, please consider me. If I can’t do it, you are free to try someone else after just a single month.
Of course every house and seller is unique. But hopefully this information is interesting!
Questions about Fort Hood/Killeen Days on Market? Please contact me, or write in the comments below for everyone to check out!