You see it all the time:
‘We will sell your house fast!’
‘Sold in one day!’
‘Call us and start packing!’
Somewhere we have convinced ourselves that selling a home quickly is the only way to go. And the selling public has bought into the same myth. The only type of sale is the fast sale and anything else represents failure.
So what do Realtors do? They tend to focus on speed, pushing a marketing message that promises a speedy sale to please clients who feel that a home sold quickly means a job well done.
And it can. Sometimes speed can be the best strategy, particularly in cases where a bidding war can be created, if the market is falling quickly, or if a particularly great opportunity presents itself on the buy side.
But a quick sale shouldn’t be the goal as a client — the best price and the best terms should be the goal and if it takes a little time to achieve those goals, so be it. Focusing solely on speed can mean losing some value in the long run.
The value of your home isn’t as stable as you might think.
Sure, there are some homes that may never (in their current physical state) be less than a certain value or more than a certain value (these are called market caps), but there’s a large gray area in which a home could realistically be valued anywhere within. Aside from the material value of the brick and mortar building itself, people often think of factors like proximity to retail, what school district the home falls in, or easy access to major highway systems as factors that additionally determine a home’s value (location, location, location, right?). But what about other factors – factors that change temporally and thus draw the connection between a home’s value and timing rather than just surroundings.
Think about comparable sales (comps) for example. It’s the classic supply and demand equation from our freshman year econ class that clients so often forget. Higher supply of goods means prices are driven down, right? If you try to sell your home while 10 other similar homes in your neighborhood are up for sale, it might not only be harder to find a buyer, but the value of your home automatically both impacts and is impacted by the value of those other homes. Wait until there’s only a few up for sale nearby and you might be able to increase that value – people have less to choose from. But, there might be fewer buyers during that time.
Other reasons that waiting might make more sense include:
- allowing time for an up and coming market to blossom further
- a home undergoing a significant upgrade
- in the case of a particularly interesting or unique home, to allow the time for a buyer with that specific need to find you
It’s complicated. We know. It takes experience and a large amount of market knowledge to be able to understand and interpret these factors appropriately, which is why not anyone can just jump into the real estate market on a dime and expect to be a successful Realtor, but that’s another argument for another time.
Ultimately, timing (or seasonality) is something to be taken seriously. Very seriously. And ignoring the timing of a sale is one of the biggest mistakes we see people in this industry make. But that’s the thing – it’s about timing not speed. Speed implies that quickness is the only focus, while timing implies an element of strategy. For most of our clients, value is the goal, and speed is just an added plus, if the transaction happens to work out that way.
Learning the nuances of this sort of timing can be tricky, but the savviest and most experienced Realtors tend to have it down. Those are the ones who aren’t afraid to let you know when waiting the market out is the best plan in the long run (even if they still brag about speedy sales because, let’s face it, it’s what people want to hear). A Realtor who promises speed regardless of market factors that may dictate a more slow or cautious approach is likely more concerned about his or her own personal gain, rather than the client’s.
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