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Do you pay your doctor only if the cure to what ails you is a long time coming? Does a contractor earn his wage only if it takes more time than you’d hoped to finish a home improvement project? Are you happier with your mechanic when it takes weeks instead of days to repair your car? In this world of instant gratification, the service providers who don’t get the job done right away are considered not as skilled in their trade as the service providers who work quickly and efficiently.
So why is it, when a house goes on the market and an offer comes in immediately, the sellers often don’t think that the real estate agent worked hard enough for their commission? In fact, the opposite is true. A quick sale means an agent has done their job with skill, knowledge, planning, and precision.
A real estate agent is hired to bring a buyer and a seller together. As listing agents, we do that by putting marketing out into the world for the public and for other agents to see. But that’s not all.
Even the best marketing, visible to the most people, is not the only thing needed to sell a house quickly. An agent must know their market. They must provide the seller with great advice using market statistics to come up with the appropriate asking price. An excellent real estate professional earns their commission not only by marketing, but by properly positioning the house to sell.
Looking at the prices of homes that have sold is perhaps the most common way to come up with an asking price, but that’s not enough. An examination of the asking prices of the current homes for sale is smart, but you must use that information, not to select a similar price for your listing, but to properly position your home among those homes with which you will be competing.
Your agent should be able to provide you with the absorption rate of homes like yours in your area. Absorption rate will tell you the pace at which homes are selling in a given time period. Let’s say, in the past year, 12 homes like yours have sold. If 16 homes like yours are currently for sale, then at the current rate of sale, it means that 75% of the current listings will sell in a year’s time.
While it is true that no one can guarantee the speed at which a house will sell, there are ways to up your odds of selling quickly. Using the numbers above, you can see that homes are selling at a rate of 1 per month. If 1 per month sells, to figure out your chances of selling in 30 days, divide the number sold in a month (1) by the number of homes currently for sale (16), then the odds of selling a house like yours in one month is just 6%. That means that 94% of the current inventory will NOT sell in 30 days. And that is assuming nothing else enters the market in that length of time.
How do you sell in 30 days? Your house has to be a better value than 94% of the competition. Notice I did not say a lower price than 94% of the competition, but a better value. There is a difference, and a real estate agent who is skilled in their trade can help position your home appropriately, and can increase your odds of selling quickly.
The market value of a house isn’t the price for which others sold. It isn’t the appraised value, it isn’t the price at which other homes are listed, and it isn’t what the seller has in it or wants to get out of it. It IS what a buyer is willing to pay for it.
Have your agent help you properly position your home among the competition and you will find a ready, willing, and able buyer in the time you desire.
*This article was reprinted with permission from the Knoxville News Sentinel April 14, 2024 Edition.
