Stewards Log: 19:41:05:06:2010 on Real Estate Monday
Have you every wondered to your self; “Self, how hard could it be to sell my home?”
If you have I have to wonder why you converse with yourself as self, but enough monday morning humour, sure you have. From one perspective it can seem like the easiest thing in the world, a For Sale sign goes up on the lawn and a few days later it’s a Sold sign. On the other hand there is the home in your area that got a For Sale sign, and kept it, and changes it, and kept that one, and changed it…you know the one.
Today I would like to share with you, what it takes to sell a home, and I am not talking about Blake’s version (**language warning**), whether you are going it alone or hiring a real estate professional there are only 4 factors that affect the ability of a home/property/ect.
Marketing – Condition – Location – Price
To help you understand the relationship between them I have created this grid (on the left). You may notice right off the bat that there are only 3 factors on the grid, although location considered the #1 factor, short of moving your property you can not control it. So let’s look at the other 3;
Marketing : I know who is going to by your home…not by name, but they look a lot like you did, in the same sort of job, have the same sort of life as you did when you bought this home.
How focused your marketing is on the “LARGEST” demographic of likely buyers for your home is the second greatest contributor to you sale. The price could be great, the home could be a castle, but if someone willing to buy it does not know about it then it wont sell.
Condition : This should come as no surprise, but the better the condition the better chance you have of selling your home. Look to the professional and ask yourself why do home builders put just a little furniture in model homes, why don’t they leave them empty? Ok so maybe they know something, then if that is the case why don’t they make it look lived in? Ok maybe they know something else….yup. So long story short, make your home look like a model home you would see in a magazine, because that is what people want to buy, the lifestyle that the home offers; after all the home most keep itself clean and tidy.
Price : It’s all about the price. You can fix a bad location, or poor condition with a lower price, you can spend tons of money on marketing but if the price is wrong it will do no good. So what can I tell you about price…GET IT RIGHT.
So let’s take a look at how our matrix works. If your home is priced at market value, shows at about a 5 and is marketed about 50% to the largest purchasing demographic (the other 50% spread out to make sure no one is missed) you would have 3 points all on the Average Time a Home takes to sell in your market. For example in Ottawa right now the average time for a condo to sell is 18 days, so that is exactly the return +or- a day or two I would expect.
Now what if we priced it at 5% below the market value, advertised it with a 75% focus on the Key demographic and it showed around an 7.5. I would have to say it would sell a lot faster. How much faster would depend on the competition, oh no a 5th factor, scratch that.
Seriously thought, the actual time it would take to sell would be a lot more complicated math, with examples set up as it is, your home would be in the 60% – 75% of the bell curve, that is to say sell faster than 75% of all the homes sold in the last 3 months.
So why don’t you give your home a speed to sale test and see where you come in on the grid.
If your average on all 3 factors is in the smallest circle, your home should sell faster than 90% of the recent (3 months) sales.
If your average is in the 2nd circle, your home should sell faster than 80% of the recent sales.
3rd circle -> faster than 60% of recent sales
4th/last circle -> around the average time on the market.
In the black? -> is not the place to be, you might want to consider -> Changing your Marketing or Improving the condition of the home or Raising the Price (gotcha) or a combination of all 3 (the third was lowering the price by the way)
Real Estate Dave