Saturday, June 17, 2017

Death By a Thousand Cuts

The real estate market in the Greater New Haven area is bifurcated these days.   Some things sell, often with multiple offers, in a few days, while other properties don't even get shown, or don't get offers at all.  The difference is mainly in the urgency that the listing conveys to buyers--they will bid on something that they think won't be there the next time they look, but will wait and ponder on everything else.  There is enough supply so that buyers feel that more will come on every week.  It's a little like Tinder--there have been articles saying that dating apps actually reduce serious relationships, because people can't choose and settle down, when each visit to the site brings new and sometimes exciting options.  Buyers can visit real estate sites whenever they please, or set themselves up for automatic notification of new listings.  This means that they are constantly being presented with new options, hence reducing their sense of urgency about an exisitng one.

In our region, some towns and neighborhoods are hotter than others, and may lack sufficient supply.  There, buyers will put in offers more quickly, although they may then back out on a contingency clause if they find something else they like better.  So, if you don't live in a hot area, like East Rock or Spring Glen, what do you do to get buyers to make offers?

Well, the key thing is not to overprice at the start.  Listen to your agent, and look at other comparable homes.  If you feel that you must try a higher price, make an agreement with your agent to lower the price at a certain point, and go ahead and sign the price reduction at the same time as the listing, so that you don't forget what the advised price was.  And finally, if you do start too high, don't chase the market down.  I titled this article "Death by a Thousand Cuts", because I see a lot of homes, especially in the Shoreline towns, being reduced over and over again by small amounts (and I really mean small--I've seen reductions as low as $1).  While you may think that a reduction will get your home looked at again, what many reductions will do is make people think that there is something wrong with your home, especially if they come from another part of the country where the market may be stronger (and that includes, unfortunately, almost everywhere). 

So, when you do reduce the price, make it dramatic!  Make a statement that you are ready to do business, and choose a price that is compelling, and one that will inspire urgency in a buyer.  Don't feel that you need to save your pride; save the sale instead.  Give buyers a reason to stop looking, and to settle on your home before someone snaps it up at a price those buyers know is going to make it sell quickly.