For illustration, let’s compare two Lake Minnetonka single family homes for sale in the market. We’ll assume they’re comparable in all the pertinent ways. They’re the same size, the same style and the same age. They’re even located in the same neighborhood. The only difference is in the asking price. Home A is listed at $279,900 and Home B is listed at $265,900. Let’s assume a buyer comes along and looks at both homes and determines that either home would be a great fit for his family. Realistically, which home do you expect will get the first contract offer? Let’s examine several factors worth remembering when it comes to pricing Lake Minnetonka single family homes for sale.
Lake Minnetonka Single Family Homes: Price Right and Sell
The illustration above, although relatively simplistic, is accurate in the way some sellers view their homes when they list them for sale. While many people may think pricing the home higher than it’s worth may give themselves room to negotiate, in truth such a decision could dissuade a buyer altogether.
A competitively priced home at the outset will likely sell at the higher end of the value range. If it stays on the market for an extended period of time, the lower it ends up in that range. According to Zillow, homes that linger on the market tend to sell for considerably less than their listing price – as much as 5% less after just two months.
Often there’s an ongoing battle between seller and real estate agent. The homeowner has an extremely one-sided opinion of the real estate market, and his experience is likely limited to only one home – his own. Real estate professionals, of course, are equipped with the knowledge and experience of what’s going on in the various neighborhoods in their market. Armed with limited knowledge, some sellers stubbornly over-value their homes – this is particularly the case with homes for sale by owner. Real estate agents have the advantage of knowing that Lake Minnetonka single family homes for sale that are priced right and show well will sell.
Because the real estate market and prospective homebuyers usually respond to new listings in the first several weeks, it’s important to enhance a home’s attractiveness right off the bat. Price the home right and it will sell – especially if you take your agent’s advice on cleaning, decluttering, staging and improving the home's curb appeal. Price it too high or throw it on the market before it’s ready to show and you’ve hurt your chances of a sale. Little or no interest means the home stays on the market longer than it should, newer, more competitive listings are added and your home becomes “old news.”
As an unsold listing loses interest, it usually results in a price reduction – especially after several weeks or months of little activity. In addition, the home may very well develop a stigma attached to a sales price that started too high, was reduced, but still remained unsold. When that occurs, savvy agents and buyers often make an offer that’s even lower than the reduced price. The result isn’t pretty, as sellers risk losing the momentum and advantage of being a new listing on the market for Lake Minnetonka single family homes for sale and quickly surrender their bargaining power.
Add to that scenario the risks of a changing market and you have an even more challenging set of circumstances. Let’s say a seller lists his home in April in an active early spring market. The chances of an overpriced home actually selling can be impacted by increased inventory, an economic slowdown, rising interest rates or other market conditions. Six months later, the price range for the home is substantially lower than it would have been if it had been priced right in April. Therefore, changing market dynamics is an undue risk a seller should take by pricing a home too high.
Continuing the nightmare, let’s assume the house remains unsold on the market. As more time goes by, the sellers may get complacent. Their enthusiasm about selling their once-prized home severely dampened, they become slack in their ability or desire to show the house in its best condition. Curb appeal suffers. Word on the street and in the Lake Minnetonka single family homes market is, the house “has issues” since it’s been on the market for so long without much activity.
Prospective buyers that do show interest end up low-balling the price, testing to see how "motivated" the seller is.
A word of advice to sellers: If you’re serious about selling your home, take pricing it just as seriously. Have a plan in the event your home doesn’t sell quickly. If you find that you and your real estate agent disagree on the price – as long as it’s not a big difference – consider asking the higher amount. However, be prepared to reduce the price fast if you need to, especially if the price range is more in line with the comparably priced homes getting high traffic and multiple offers. Activity among Lake Minnetonka single family homes for sale will likely improve and the market will respond accordingly to a property that is perceived as being priced correctly by a seller who demonstrates they are serious about selling their home.
See more articles pertaining to Lake Minnetonka single family homes for sale in the two sections of articles on Lake Minnetonka Real Estate and Lake Minnetonka Homes for Sale just below Lake Minnetonka Real Estate Categories in the column to your right.
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