Gauging Market Response
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What do we do if we’ve done all our analysis, listed the property at a competitive price, and it still doesn’t sell?
Well, a property is only worth what someone is willing to give for it. Sometimes the market, for whatever reason, just doesn’t respond the way that we think it will. That means our pricing strategy can’t just end with the list price.
In this case, we need to be responsive to what the market is telling us. We need to develop a plan of action for post-listing situations.
Remember that buyers look at 10-12 homes on average before they buy one.
So theoretically, homes that show well and are priced correctly should get one offer for every 10-12 showings.
Our goal is to get 10-15 showings as soon as possible, which theoretically should result in one of those buyers making an offer and hopefully closing on the house.
Here are some key metrics to keep in mind:
If we don’t get a decent amount of showings within about a 3 week timeframe, we will know that our listing is at least 10% overpriced.
If we get a good amount of showings, but no offers, we will know that we’ve got it at least 5% overpriced. The price is attractive enough to get them in the door, but not quite low enough for them to want to buy.
I like to keep price drops as a last resort, but occasionally they are necessary to get a property sold. This is why we need to constantly analyze the number of showings we’re getting and plan our pricing strategy accordingly.
Usually, our Market Analysis will keep us from being in this position, but if for whatever reason, the market doesn’t have a strong response, we’ve still got tools in our belt to get the job done.