Nov 3, 2020

When Speed Kills // Selling a Home FAST??

iStock_000003418132SmallAgent: “We are going to sell your home fast!”
Seller: “Maybe that isn’t the best strategy”

Selling your home fast may or not be the right strategy even though all agents have been trained to tell you exactly that. Apparently selling the home fast is the metric against what success is judged.

It is not necessarily the correct way to go about it.

Understand, this is not to say that selling a home quickly is a poor strategy…quite the contrary.  It is simply an argument that the circumstances which surround the sale will dictate whether ‘SELL IT NOW!’ is the correct mindset.

Pricing is a Strategy

Remember, pricing is a strategy and not an event.

Stated differently, the act of pricing a home for sale is one that combines many different factors — some internal and some external — that determine the correct course of action. The most common mistake that Realtors (and sellers) make is that they look at pricing as a single event. In reality, pricing (or probably better stated, VALUE) is fluid and changes almost daily. Imagine the effect on price if 5 other homes in your neighborhood come on the market in a 2 week span? Likewise, imagine the effect on pricing if the largest employer in your marketplace either adds or cuts 500 high paying jobs…

What is the Objective?

Ultimately, pricing strategies need to be understood within the context of the seller’s overall objective.

In most cases, the sale of a home will result in the purchase of another.  In many of these cases, the ability to purchase is driven by the sale of the existing home. Maximizing yield is important to almost everyone and understanding the market factors which drive both markets will dictate the correct strategy.

Fast or Slow, You Decide …

A few examples where taking your time might apply:

  • Unique homes (modern architecture, upscale loft properties, highly customized properties, homes is unique settings) may take a longer time to find a buyer.  The discount required for a quick sale may leave significant equity on the table
  • Situations where a bad comparable sale is hampering appraisals
  • Accelerating markets
  • Homes undergoing significant upgrades or renovation
  • Moving up in a declining market

A few examples where selling a home quickly might be a better strategy:

  • A debt based sale and subsequent purchase in an increasing interest rate environment
  • A great opportunity on the buy side
  • Downsizing in a falling market
  • Where a bidding war can be created
  • Where a family reason (young children, illness, multiple pets) makes showing a challenge

If a Realtor says that they are going to sell your home FAST without first taking the time to discuss current market and your needs, then they just might be more interested in their own financial well-being than yours.