Part Two : Home Buyer Psychology
In the previous segment of this series, I discussed the importance of making your house visually appealing to get ready to take to market.
Now, we'll spend a little bit of time talking about the psychology of properly pricing your home.
Timing Is Everything
Do you remember a time when you had a bag of stale potato chips? Kind of made you feel like asking for a refund or exchanging it for another.
Well, similarly, the longer you have your home listed on the market without activity, the less of a chance you have in getting fair market value for your property. In essence, your house has gone stale.
The first four weeks or so of 'going live' is extremely critical and the best chance you have of generating an offer. You'll want to create a sense of urgency in the mind of the buyer.
Shorter Time = List Price Offers...Usually
You see, in the early stages of going live, serious buyers don't want to lose the opportunity of someone else snagging the property.
But, the longer a house sits without activity, the more leverage buyers tend to have. They'll start to ask themselves why the house has not sold yet. At that point, you can expect buyers to start low-balling!
So, the main objective in properly pricing your house is to create a sense of urgency among potential home buyers and instill a "someone may buy it first" perception.
What Would You Do Here?
Still need some convincing? Ok.
Let's take a look at two houses. Both are similar in features, amenities and price. One has been on the market for 120 days. The other, only 2 days.
Now, assuming you are willing to buy either house, do you have more room to negotiate on the house that was just listed or the one that has been sitting on the market for 120 days?
The owner for the home that was just listed is less reluctant to leave any money on the table because they still have leverage. Time is on their side for the moment.
The seller who's been sitting stale could be, at this point, willing to entertain offers below asking.
What do you think I'm going to suggest to a buyer who's looking at those two listings? In the case of the 120-day house, I would advise my client to start off by offering a much lower offer because at this point, there is not much activity in terms of other buyers viewing the property - no competition exists.
In this segment, we covered home buyer psychology and the importance of creating a sense of urgency within the first few weeks of putting your house on the market.
The next segment of this series will cover the way in which to price your home and how home buyers perform their searches online.
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