Why Do Some Homes Sell Quickly - Tom Grisak Estate Homes Realtors, Inc.

Why Do Some Homes Sell Quickly?

11-18-09

First, let me clarify what "quick" means to me in residential real estate terms. When we sell a home within the first two to three weeks of listing it, I consider that a quick sale. I cannot speak for Realtors in other areas of the Metroplex, but in Allen, Fairview, Lucas, and Parker, it usually takes several months to sell a home, or longer. We have had, and in fact still have, some listings for over a year. While that is not the norm, it also not unheard of in a sluggish market like the one we are currently experiencing.

When I take a listing, depending on the time of the year, I know going in it might be four, five, six months or even longer to sell it. Much of that is determined by the price of the home and the market conditions. Obviously, more expensive homes tend to take longer to sell because there are fewer buyers.

In addition, generally speaking, the more land the home is on, the longer it usually takes to sell. That extra land not only adds to the price of the home (which starts to rule out potential buyers), it also rules out a certain percentage of buyers who like the home, can afford it, but don't want to take on the costs and responsibilities that come with owning a home on acreage.

More affordable, zero lot line homes in high density developments like Heritage Ranch of Fairview usually sell much more quickly than homes with two or more acres in Fairview, Lucas, or Parker. I'm used to this fact and prepare our sellers for it right up front.

I'm no different than anyone else. When I see a new listing sell quickly, mine or anyone else's, my first reaction is someone underpriced it, either intentionally or unintentionally. Of course, that may or may not be true, but the perception is always there.

To be perfectly honest, it is always a little awkward for me when one of our new listings hits the market and goes under contract right away. Of course, I'm happy for our seller because they can get on with their lives, but I always have to ask myself "Did I price their home too low?" "Did I sufficiently test the market?" "Did I cost my sellers money?" More importantly, I wonder "Do my sellers think I underpriced their home so I could make a quick buck?" All those thoughts go through my mind, and I really do agonize over them. Maybe I shouldn't, but I do.

My goal is always to price a home near the top of the market, market it beautifully and widely to the world, and then let the market decide where it sells. If the home goes under contract right away I want to have the confidence it was because we found the perfect buyer, not because I underpriced it.

By the way, you will never, ever see a postcard coming out of our office (or see any special mention on this site) of our having sold a home quickly. Nor would I ever make the statement "I sold this home quickly and I can sell your home quickly too". Some Realtors use that tactic to try to get new listings, but if truth be told, one quick sale does not lead to another. As strange as it may seem to most people, I don't even want the reputation of a Realtor who turns homes quickly, so I'm sure not going to market myself that way.

Why Doesn't everyone just wait for the price to drop on a home they want To buy?

In fact, some do. There will always be buyers who like to wait for the price of a home to drop at least once and maybe more times before they make their offer. They want to "soften up" the seller and outlast them on pricing.

In most cases, if the home has a lot going for it, buyers who try to outlast the sellers are going to lose that contest. Why? They are only one buyer, but there could very well be many other potential buyers for the same home who are not going to wait for the price to drop. Playing the odds by trying to outlast the seller on a desirable home is usually a losing proposition. The buyer's timing had better be perfect for that to work.

I can't tell you how many times I've heard ... "We wanted to buy that home you had listed on so and so street several years ago, but we waited too long to make our offer". If they are still talking about a lost sale from that long ago, I know it really bothered them. Unfortunately, either they or their agent just assumed the home would be there at a lower price when they were ready to make their offer, and they lost out. It happens all the time.

This all raises the question ... "Why do some homes sell quickly?" I've had plenty of time to think about this over my long real estate career, and I believe it comes down to one or more of the following three reasons. Keep in mind, I am not talking about distressed properties selling at fire sale prices.

As I have already discussed, that is always a concern. It may or may not be true. I would never intentionally underprice a home to make a quick sale, nor would any honorable Realtor ... unless the seller specifically instructed us to do so. In my case at least, those occurrences are few and far between. If I sell a home within a month or two, that's a pretty quick sale in my book.

We are fortunate that our sellers tend to be the patient types. They would rather test the market on the higher side for awhile rather than sell their homes quickly at a lower price with the distinct possibility of losing money on the sale. They have time on their side. Not surprisingly, our homes typically take longer to sell than those listed by agents who have the "turn and burn" mentality when it comes to their own listings.

I have never had the luxury of selling homes in a market where you simply list them and immediately working two or three offers at the same time. Think California, or at least the way it used to be. In our area of specialty, it usually just takes time to find the right buyer if you want to maximize the sale price of your home.

If sellers ask us to price their home to sell quickly, we can certainly do that, but even then, it often takes time to find the buyer. Remember, the buyers and agents have to know it's a screaming deal before they can get excited about it. If they have little knowledge about home values in an area, how would they even know it's a great deal?

The quick home sales almost always involve buyers who have been looking for some time in the area. They have seen a lot of homes and already know what they can get for their money. They might even have had a home or two sell out from underneath them while they dragged their feet. So the agent and their buyers are educated on the market. Those are a listing agent's best friends. They can spot value when they see it, and make their move on the home right away.

Reason Number Two - The Home Was Priced Right and the Perfect Buyer for the home appeared

Obviously, this is the kind of scenario every good listing Realtor wants. They have done their homework in pricing the home. They priced it not so high as to scare away a potential buyer from making an offer and not so low as to cost their seller money. And then, they found the perfect buyer for the home ... either by themselves or with the help of another buyer agent. If they are lucky, the buyer appears immediately.

There have been times in the past, including one instance just this year, when I knew I hit the price exactly right and we still sold the home quickly. In this particular case, we were pushing the upper limit on pricing. I felt I couldn't go higher because the home did not have some of the features buyers typically expect to find in a home within that price range, namely, a pool, media room, gameroom, and fencing. But it was a beautiful home on a beautiful tract of land. I felt sure to get that price for my seller, we were going to have to find a buyer who did not place such an emphasis on those features, but appreciated the property for what it did have.

We thought we might already have the perfect buyer for the home, and as it turns out, we did. We took the home to them the minute we had it listed. The end result? It went under contract on the first day of our listing, we maximized the sale price of the home for our seller, and we sold the home to someone who absolutely loves it for its own very special qualities. They didn't care one iota about the missing features. Best of all, we earned our paycheck by finding the buyers ourselves through our knowledge of the area. Those are the kind of win/win situations all Realtors love.

Although I would love to tell you our great marketing and area presence is responsible for every sale we have, I can't. Timing and pure luck have as much to do with selling a home as anything else.

We have had listings for rather long periods of time we worked to death and never could sell. We tried price reduction after price reduction. The home had thousands and thousands of hits on our site, not to mention Realtor.com. But we just couldn't find the buyer. In some of those cases, there was not one single reason I could point to as to why the home never sold. In some of those cases, we lost the listing and sure enough, a month later, someone else bought the home at the exact same price we had it listed before.

We have also picked up listings after other Realtors couldn't sell them, and within a month, those homes went under contract. Sometimes, we didn't lower the price one dollar. Did that mean we were the better Realtors? Not necessarily, but we were in the right place at the right time. So goes the saying "I would rather be lucky than good". In reality, I would prefer to be both :-).

People's priorities and financial positions are in a constant state of flux. Buyers who are ready, willing and able to make a purchase today might not have even been in the market a month ago. When they are ready, whoever has that listing at that time is going to look like the hero no matter how hard the listing agents before them tried to sell it. As with many things in life, timing is everything.

By the way, when you are the Realtor who lost a listing that another Realtor sold at a later date (and you will be sooner or later), don't beat yourself up over it. It's going to happen. If you have done your very best to market the home professionally and extensively to the world, there is probably not a single thing you could have done differently. Just chalk it up to bad timing and move on down the road. And look at the bright side. What goes around usually comes around.