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In other sections we have discussed how to
determine an asking price for a home and the effects of overpricing and
underpricing your home. In this section, we will explore a few
strategies that involve how the time of year affects the sale of your
home, when to overprice your home, and why a seller would lowball the
sales price of his or her home.
Seasonal Pricing. The time of year
when you sell your
home can have a significant affect on how quickly you sell your home.
Consider the following when deciding the best time to sell your home and
how much to ask for when selling:
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The holiday season tends to be the slowest time of
the year. From November to mid-January, most buyers focus on the
approaching holidays. During these winter months, the colder
weather keeps them inside, money saved for a home is spent on gifts, and
those who had time to visit open houses spend their free time shopping
or visiting family and friends. Though it is not impossible to
sell a home during this time of year, most homes stay on the market a little
longer. Some buyers do come out during this time of year, but,
homes in areas of higher demand will sell closer to their asking price.
Sellers looking for a quicker sale should consider a lower price.
-
April begins the start of the traditional home
selling season across the country and continues through June. Tax
refunds are in and buyers have cash to purchase a home. As
temperatures warm up, buyers begin thinking of finding a home for their
family to move into after the end of the school year. Sellers are
more likely to receive the highest possible price for their home during
this stage of the selling season.
-
July and August begin the decline of real estate
sales in most markets across the country. Except for high demand
neighborhoods, sellers can expect to see the pool of potential buyers
decrease because most families take their vacations before school starts.
Seller can, however, still expect to receive close to their asking price
if they priced the home correctly.
-
Beginning in September and ending after Halloween
is the final hurrah of the sales season for the year. Most
families will have bought a home due to the beginning of the school
year. Sellers wanting to avoid the holiday season may have to
price lower for a quicker sale. As a result, a larger number of
investors buy during this period.
The previous calendar is not 100% perfect.
Colder climates have shorter selling seasons while more temperate
climates such as Phoenix, AZ can expect a virtual all-year sales season.
Other factors, such as the local economic climate and how high (or low)
current mortgage rates are, will also influence the number of available
buyers.
When to overprice: Believe it or not,
a home owner can sell a home that is priced higher than the prevailing
market prices. Sellers offering special incentives or marketing to
niche buyers can often force a higher sales price.
With most home buyers facing a shortage of cash but
an ability to qualify for financing, many people are unable to buy a
home. A seller offering a down payment assistance program to
eligible people can open up his or her home to a greater number of
potential buyers who would normally qualify but do not have the cash to
close. Due to the costs associated with these programs, sellers
often raise their asking prices to cover the expense. The seller's
marketing focus should shift away from the asking price and focus more
on the ease and affordability
of buying the home.
Home owners willing to offer seller financing, a
lease option, or other special situations may appeal to a pool of buyers
that do not normally qualify to buy a home. Buyers with damaged
credit, those who are self-employed, or others with circumstances that
prevent them from qualifying for mortgage financing will often
pay more for a home in order to have the opportunity to own that home.
Be sure to read the section on
Special
situations for more information.
Added incentives can often compel buyers to
pay more for a home. However, be careful not to price your home
completely out of the market. By doing so, you still run the risk
of the lender's appraisal coming in lower than the sales price scaring
away other potential buyers.
When to underprice: There are times when a
seller should consider biting the bullet and dropping the asking price
from the start. Homeowners facing foreclosure, those with an
urgent need to tap into their equity, or other situations where the
seller needs to liquidate the property fast will have better luck selling their home by
reducing the asking price. When time is of the essence, a lower
asking price will help the home sell quicker. Do not forget,
however, to factor in the costs and expenses associated with the sale of
your home.
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