When a home is on the market for a long time and it still has not sold, a homeowner might legitimately ask his agent, or himself if he is a FSBO, do I need to reduce my price? Have I overpriced it?
An overpriced listing is like death to a serious home seller, but sometimes the reason a home hasn’t sold has nothing to do with the current price. Elsewhere, I’ve written about the danger of overpricing, and that should be a consideration, but there is a huge factor that may be far more important in “getting attention” from prospective buyers.
In my experience, whenever the DOM (days on market) exceed 90 days, and especially when the DOM approaches 200, the first question everyone focuses on is the price. “Oh, it must be priced too high. Let’s drop it and try to get some attention that way.”
How well is your home being marketed? Is your marketing plan reaching buyers (wherever they may be) in this price range and for your area and for the floor plan and features of your home? If your marketing is ineffective, the price is not why your home has not sold. It’s because buyers are not even aware of your home.
Anyone who reads my blog articles knows that one of my pet peeves is ineffective marketing of homes and over priced FSBO listings. So many FSBO’s and so many practicing real estate agents think that simply putting a house in the MLS and in some local newspaper ads is all there is to this marketing business. [Realtors, don't get mad. Many of you do a great job marketing, but honestly many agents do not.] Some think they have the secret key, because they’ve placed a few haphazard ads on the Internet. There’s so much more to marketing and placement. There’s so much more to knowing how to reach prospects on the Internet.
Why does a marketing expert like Jay Abraham get paid as much as $1 million dollars to draft one letter for major retailers? Because the company can make an extra $200 million dollars in sales.
I recently listed an incredible home with an unbelievable view of International waters. It was listed by another agent, but nothing happened for six months. So my client asked me, “Do I need to reduce the price.” My answer was a probing question, “Was your house effectively marketed to your potential buyers?” His answer was a quick, “No.” He knew it wasn’t. My response, “Then we don’t know if we need to reduce the price yet. First we market, then we adjust price if those buyers are telling us the price is too high.”
Getting a home sold includes effective marketing plus a reasonable listing price. Effective marketing is not for the inexperienced. The difference between good marketing and poor marketing is 60 DOM or 324 DOM. It gets even better than that. The house that is on the market for a long time before it sells will also get a lesser price than the same house sold in 60 days with good marketing.
If you had a home listed at $425,000, but it was not effectively being exposed to prospective buyers, you could drop the price to $400,000, and still you would have no activity, except tire kickers. You could drop the price 6 months later to $387,000, and still you would have no offers. How much money are you willing to lose until you actually sell it to someone who is just looking for a steal. It isn’t always about price. YOU CAN’T SELL A HOME AT GARAGE SALE PRICES IF YOUR “FOR SALE” NOTE IS HIDDEN AT THE BACK OF A CAVE.
In today’s real estate market, effective marketing is more important than ever.
Tags: fsbo, fsbo home, fsbo listings, house for sell, sell home
