The 1964 song Time Is On My Side by the Rolling Stones is a ballad that buyers can embrace. Time is the enemy of sellers and a friend of buyers when it comes to the number of days a home has been on the market.
One of the most frequently asked questions among prospective buyers is, how long has the house been on the market? Days On Market, commonly referred to by it’s acronym DOM, is a key statistic in real estate measuring the length of time a listing has been on the market before an agreement of sale for the property is accepted.
Using the 208 closed transactions in Wallingford, PA during 2014 the chart above measure the percentage of the original asking price of a home that was realized by sellers in relation to the DOM (Days On Market). It exhibits the correlation between the selling price of a listing and the time it is on the market.
In the top performing group of 2014 20 out of 36 sellers, 55.6%, sold their homes in 7 days or less and realized 100.0% of their asking price or above. Overall this group garnered 99.71% of their original asking price. It is also noteworthy that not one listing in this group had a price reduction, they sold so fast that it was not necessary. When a home is properly priced for the market buyers take notice and act quickly.
Homes that sold within 15 to 30 days saw the percentage of original asking drop to 95.85%. Only 23.0% of this group received 100.0% or more of their asking price. Again there were no price reductions in the original asking price in this segment. For the fortunate 91 sellers that sold their homes in 30 days or less they saw on average 96.84% of their original asking price.
Time steadily erodes the value of a home, the longer it stays on the market the less a seller can expect to realize from the sale. The 151 to 180 day segment was a bit of an data anomaly as it registered an increase over the 121 to 150 day segment, but the overwhelming trend is a downward one from day one.
The first price reduction appears in the 15 to 31 day group and price cutting steadily increase as Days On Market increase.
Homes that were on the market 6 months were the poorest performers only garnering 83.90% of the original selling price.
The underscoring theme here is that time is money. The initial price of a listing is a crucial decision that ultimately impacts a seller’s bottom line, price it incorrectly from the start and there is a price to be paid.
The honeymoon for a new listing is a brief lasting 3 weeks at most. During that time a listing will get the most views online, the most visitors through the door, and the most interest by prospective buyers. Once the new listing aura has worn off it becomes increasingly difficult to attract attention, especially if the home is not priced correctly.
Many sellers will say they want to “try” a higher price for a while and reduce it later after seeing what happens. They are oblivious to what peril that strategy entails. The listing is only new once, and the proper pricing from the start is the only way a seller can realize the most financially from a sale. Successive price reductions over the course of a listing is not a viable strategy to produce the most favorable outcome.
Remember it is all about the price, and comparable sales of homes in your area can not be ignored when setting a listing price for your home. Buyers are not interested in what you paid for the home or what you want to realize dollar wise from it’s sale. They are the one who set the market price for your home.
Price it properly from the start and you will reap the most reward, price it too high and the buyers will be like sharks sensing blood in the water as they watch your Days On Market creep higher and higher and offering prices sink lower and lower.
Wallingford PA Real Estate – Wallingford, PA 19086