Real Estate Straight Talk

How Does Price Affect Time on Market

February 18th, 2016 1:03 PM by Debo Cornett

HOW DOES PRICE AFFECT TIME ON THE MARKET?  What an important question for every Seller to consider before pricing their property for sale.  Price and Time are at opposite ends of the selling process spectrum.  When considering selling your property, ask yourself this question "What's most important to me - how quickly I can sell and go on with my life or getting the highest possible price for the property?"  The answer to this question will be the driving factor and determine the results of the listing/selling process.  I often have Sellers answer, "both are important".  Unfortunately, Time and Money oppose each other.  They can't work together.  Here's a short statement to remember - "Time Equals Money".  In real estate, the longer a property stays on the market the less money a Seller is likely to realize (property becomes shop worn, other properties similar to it are getting the available buyers at a lower list price, Seller is paying expenses on a property they want to be out of, etc).  So I often tell Sellers to remember "Time Eats Money", which more quickly gets to the core of the issue.  So, here are questions that will help you decide which is more important.  1) How quickly do you need to be in another location?  2) Must the Sales Price be your most important issue and do you have endless time to wait to get that price?  Your answer to those 2 questions will tell you what is REALLY most important to you.  If you have a new job starting soon in another town or state, or if you are close to defaulting on your current mortgage, you DON'T HAVE TIME.  Time must be your biggest drive to sell.  This will result in a lower, more aggressive List Price to competitive comparable properties, but will likely sell closer to the List Price and likely higher than those competing properties that may sell months later.  If you're in no hurry to sell, you just want all you can out of your property to move to another, then TIME'S ALL YOU GOT.  These Sellers typically list at the higher end of the price range over competing comparable properties and will most likely be on the market long after those competing properties have sold.  Per national statistics, after a long period of time on the market, with each price reduction, Sellers will likely experience an even lower Sales Price than they would have, had the property originally listed at that reduced price.  Remember "TIME EATS MONEY" and "MONEY EATS TIME" (the more money you need out of the sale, the more time it's likely going to take to sell, the more time on the market, the less likely you're going to get the most money out of the property).
Posted by Debo Cornett on February 18th, 2016 1:03 PM