Every real estate market has a “window of opportunity.” As of March 2011, homes on the Westside of Los Angeles are selling reasonably well if they are marketed effectively. The average time on the market in Santa Monica now is about 10 weeks. There have been short periods in the last several years when this “window” was as brief as three weeks. During slower periods it can be as long as four to six months.
Sellers often do not care how long it takes to sell their home and may be willing to wait as long as it takes to try to get the price they want. However, even in a “seller’s market” such as we have had frequently, about 40 percent of the homes on the market do not sell even after several months. If a home remains on the market too long, relative to the “window,” it will gradually be perceived as having less value.
Nearly every home that comes on the market is considered new and fresh at first. Most real estate agents come out to see a home and decide instantly if it is an outstanding value or not. That decision is based on several factors: location, condition, floor plan, size, and price of course being primary.
If the agents feel that most of these factors are positive, and their prospective buyers agree, the home will usually get a lot of immediate attention. Every buyer wants to see a home that just came on the market in their price range, and a buyer will have even more interest if three or four other people are interested in the same home too. Full price offers are not at all unusual in such cases, and buyers are often willing to bid above the asking price in multiple offers.
Conversely, if a home remains on the market for a long time, people begin to wonder what might be wrong with it or conclude that it is overpriced. Once it has been on the market much longer than the average time that most homes in the area take to sell (the “window”), fewer people are interested in seeing a listing, and this leads to a perception of lower value. Rather than being concerned about losing the home of their dreams to another bidder, buyers may feel justified in making a low offer, being concerned about paying too much for the home.
Because marketing strategy is so important and it can make a big difference if the home sells during the “window,” the best agents have developed plans and systems to assure bringing the maximum attention to a listing in the shortest period of time. They know how to approach the market with a very thorough and honest evaluation and preparation before any prospective buyer sees the home. In addition, staging and pre-inspections of a home can often make a significant impact. It also is important to be sure that the agent you hire to represent you has the experience, staff, and high energy to maximize the successful results once marketing is begun.
For the past 25 years Michael Edlen has provided real estate counseling services to prospective buyers and sellers. More tips and information are available on MichaelEdlen.com. He can be reached at 310.230.7373 or Michael@MichaelEdlen.com.