People who are selling their homes need be cognizant of the questions that buyers ask when viewing homes.
The first question on every buyer's mind is invariably: How Long Has That House Been on the Market? A close second and closely linked with the first question is the ever present query: Will the Sellers Come Down on the Price?
Other variations of this question include:
- For how much do you think we can buy this house?
- What would the seller's accept for their home?
- Is there negotiating room on this one?
- What should our initial offer be?
- How low should we go?
Knowing that potential buyers will ask these questions and submit low-ball offers, many Northern Virginia homeowners wishing to sell their homes continue to price their homes at above the price that the market will bear, hoping to provide themselves some negotiating space or wiggle room. Read why this strategy for selling your home may not be your best option: "We can always reduce the price later" -- Price Reductions are NOT A GOOD MARKETING PLAN for Northern Virginia Homes.
Both buyers and sellers in Northern Virginia need to be aware of an important statistic regarding the real estate market, namely the ratio of sales price to asking price. This telling number provides solid proof that sellers are coming down on price and buyers and their agents are negotiating lower prices on listed properties.
How much? It varies by location. Take a look at this chart showing the statistics for home sales in January 2008:
In these areas of Northern Virginia, we're seeing sales prices ranging from 80.93% of the listing price (in Manassas City) up to 93.6% (in Arlington) and 94.51% (in Falls Church). Considering that the average listing price in Arlington was just a hair under $600,000, this amounts to approximately a $38,000 final price reduction.
Another consideration: These numbers DO NOT even include seller subsidies which further reduce the seller's net proceeds, nor do they take into account prior price reductions already inherent in the listing price. Thus, all signs indicate that the actual negotiating room for Northern Virginia buyers is substantially greater.
Within counties and cities, these numbers can further vary. If you are planning to buy or sell, ask your Northern Virginia REALTOR for the statistics in your area of interest.
As an example, here's a breakdown of the January 2008 numbers in the various zip codes in the City of Alexandria:
22301 (Del Ray / Rosemont): 93.13%
22302 (Braddock Heights): 95.72%
22304 (Landmark / Cameron Station): 92.57%
22305 (Beverly Hills / Warwick): 82.93%
22311 (Stonegate): 94.56%
22314 (Old Town Alexandria): 92.04%
Whether you are buying or selling in Northern Virginia, these days, more than ever, Choosing a Good Negotiator for Your Real Estate Deal is essential.
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The biggest argument for not listing high is the fact that fewer agents will see the listing in the MLS and fewer buyer see it on IDX.
Also, the lower the list price, the higher the buying pool.
This is so easy. Why doesn't everyone see it?????????
We see that here in Virginia Beach but not as bad. In fact the prices on the homes actually went up a bit here. Strange indeed.
Brian,
Very interesting stats and graph. I always let sellers know that if those houses that are overpriced at the start, not only have less buyers looking at them, but also end up netting less in the end than if they had of been priced right at the start.
Jo
Brian,
Two thoughts...I wouldn't give a definitive answer to any of the questions you posed...and furthermore, your question, "Will the Sellers Come Down on the Price? "...Is the Pope Catholic??? Thanks, Fran
P.S. I agree with Lenn...I'd rather have a home priced low with an agent working to get me my price...than an agent who recommends the old fashioned and outworn game of "price high, then come down"!
The problem is - you have sellers assuming Buyers will low-ball them and insist on pricing too high to start!
If they would just price right to start - buyers would buy early and everyone would be happier!
In Northern Delaware
200k and below is good
300k is slow and
400k+ is dead! Down about 15%
Its a great time to move up in our area.
Now Brian I really like that chart and your way of thinking. Seems that the fact the an area is at an average selling price of (whatever) percent give a buyer a reasonable target price. I am going to see about these stats in our area.
Your Friend in Charlottesville