More and more agents are using a blended strategy during this transitional market. This blog post will discuss how that works.
Real estate is a funny business, maybe because we are dealing with the general public and their most valuable asset, maybe because we are free-marketeers, influencing and reacting to an ever-changing environment.
I don’t know.
It certainly is not boring.
Reacting, not pro-acting
If you’ve been paying attention, you know that the market has changed. We are currently reacting to that change in unusual ways.
You could say that the spring market came early for buyers and late for sellers. This year, January, February, March and part of April saw record numbers of buyers rush into the market, urgently looking for something to buy.
At the same time, home sellers, after a fabulous year in 2015 were a little late to list. Their feeling might have been, “the longer I wait, the higher the price will be” – FOMO in reverse – Let’s call it the fear of cashing out too early – FOCOTO!
Ready. Set. GO.
It takes about week to properly get a home on the market. There is paperwork, pictures and details to collect and manage. There is last minute decluttering and primping to do. It is important always to do everything right. You want your listing to have complete and accurate information, great pictures and responsive agency staff with ready answers. But the price is the most important thing.
Ready. Set. GO. Stop. GO Again.
A new phenomena has emerged in the past few weeks – Price increases! It used to be on real estate yard signs when you saw “Price Adjusted” you knew that the price had been reduced. The sign stickers always made me grin, not because I’m a smug know-it-all that enjoys seeing other realtors and their clients struggle. I don’t. I just always thought that, “Price Adjusted” was kind of disingenuous, a little defensive, vague and misleading.
I prefer clarity.
I prefer honestly.
“Hey, we priced too high.”
“We thought we would try it out at a high price for a few weeks first.”
I prefer the “Price Reduced” signs.
It is what it is.
But that was then. Now price adjustments can mean price increases as often as price decreases. What is going on here?
Blending the old and new
It is a blended strategy. The first week, new listings are listed low, offer night is a week away. On offer night, bids are collected and the house is sold to the highest bidder.
If the bids are too low, or if there aren’t any, then the price is raised to what the seller really expects and hopes for, and then we do things the old fashioned way. We market and we wait and we negotiate.
It is what we have to do as sometimes the market is behaving as it has for the past 15 months and sometimes it is behaving more traditionally.
With home sellers, realtors would be wise to manage expectations. We don’t have all the answers (but we should have better answers than our clients).
Let’s be rational. Let’s be logical. Let’s be real.
You could have listed and sold your home last year for (say) $500,000. What do you realistically expect to receive this year?
Most realtors agree that what we are in now will last four to six weeks. The real estate market is like a big boat and it takes a big ocean and a bit of time to turn the boat around. I suppose we have no choice but to continue doing things the way we are doing them during this transitional phase. It is confusing and it is weird but it is the best strategy for a changing market.