Redfin published more data today arguing that a listing overwhelmingly gets most of its traffic on debut: about four times more than it does only a few weeks later. What we didn’t discuss was the correlation between traffic and a transaction. Is the day-one traffic spike due mostly to rubber-neckers?
My sense from watching how listings actually sell is that the spike is real, and that it behooves clients to focus on a perfect debut.
The question was still on my mind when we got together for a monthly business review with Dave Billings, who runs Redfin Seattle. When the conversation turned to listings we’d been struggling with, Dave commented that if a listing doesn’t sell in 60 days, we almost never sell it all.
He also noted that, as time goes on, our system of surveying clients sometimes make agents recalcitrant to tell a long-time client what he really needs to hear, for fear that the client will resent the advice he fills out the survey.
What’s your take? Do most of your sales occur in under 60 days? Or does it take longer for reality to set in?
Benjamin Ficker says:
We deal with short sales more then 99% of the time. If we don’t have an offer in the first 2-3 weeks we lower the price. And we lower the price every 2 weeks until we get an offer. My feeling is, if the home is priced right (for the condition, location, etc.) then you should get an offer within that time frame. I think 60 days to get an offer (without price reductions) is WAY to long for this market.
August 23, 2010 — 3:54 pm
Greg Swann says:
We like to be done by day five. Doesn’t always work out, but that’s what we’re aiming for. We launch a new property on Friday early morning, just after midnight, and that means we roll out everything all at once. We want to hit any emailed hotsheets on Friday morning so that our house is scheduled for that weekend’s showings. If we’ve done everything right, we should have one or more offers by Monday morning. Allow for counters back and forth and we want to be all the way buttoned up by Tuesday.
Nota bene: I’m talking about quality listings. I do some low-rent stuff for my investors, but that’s a completely different marketing strategy.
As Benjamin says, right now in Phoenix, if a home does not generate good offers right away, we need to look hard at significant — and, if necessary — regular price reductions. It’s hard to generalize, though, because our market is so screwed up. For an equity seller — a possibly mythical creature — to waste the first week on market is often a terminal mistake.
August 23, 2010 — 7:05 pm
Ryan Ward says:
This is why pricing is so important. Get it priced right to start with and you will have not only the most views, but the most views at what is more likely to be the best apparent value.
This typically leads to a higher net sales price for a seller than a higher price that is later reduced to the right price to illicit an offer.
August 23, 2010 — 7:28 pm
J Philip Faranda says:
Glenn-
My observation in New York is that a home will sell within 30-60 days of being priced right, not necessarily listed.
However, if it is not priced right to begin with, it will end up selling for less than it could have. 2/3 of the homes sell in our market place in 120 or more days, at about 94% of asking. For those homes closed in less than 90 days, they average 97% of asking.
If a home doesn’t attract a good offer in 60 days, that seller needs a talking to and a price drop. All my redfin referrals have been buyers, but if I had a seller I’d make sure he knew the deal, survey or no survey. For what it is worth, most of my survey respondents are sellers, and I have something like 25 out of 27 10’s. Just tell people what they need to hear. We have to advise the client.
August 23, 2010 — 9:39 pm
Brian Brady says:
Glenn,
Please pass along my congratulations to Febe Cude #98:
http://online.wsj.com/ad/top400_09.html
August 23, 2010 — 10:27 pm
Eric Bramlett says:
What’s your policy for recommended price reductions? Typically, we reduce if we don’t see an offer in 30-45 days at a specific price (with exceptions.) As Phillip said, a home usually sells within 60 days of listed w/ correct pricing.
August 24, 2010 — 5:45 am
Joe says:
“When the conversation turned to listings we’d been struggling with, Dave commented that if a listing doesn’t sell in 60 days, we almost never sell it all.”
Depends on the market. Our average time on the market is 90 days, so there are a fair number of folks buying homes here after the 60 day threshold. We have a lot of buyers relocating here as our local economy is doing well. We recommend to our sellers to price their home a little high and see what happens. We might miss the buyers that are buying this month, but the buyers that are buying next month we might catch with a lower price.
Having said this, it is always prudent to put your best foot forward when listing a home.
August 24, 2010 — 6:57 am
Jb says:
No question about it, the first few days are critical to a successful sale. The high percentage of short sales changes that somewhat. “Selling” a short sale is essentially a non-starter to a certain extent. The national average I think is you sell it 2.75 times before you actually “sell” it.
August 24, 2010 — 7:50 am
Sean Purcell says:
I don’t have the full opera up that Greg does, but we strive for the same ideal: from going public to offers in the door should be measured in days in the San Diego market. If you go more than two weeks without an offer, you’ve done something wrong… which, generally speaking, means you’ve priced it poorly.
August 24, 2010 — 8:25 am
Al Lorenz says:
We’re in a small, resort market. Our average time to sell is currently running 190 days! The entire market only sold 125 homes last year, and we have 300 on the market right now. Many of the sales are “emotional” buys, where they fall in love with the home and its location. The problem with reducing too quickly is that there may only be 3 or 4 potential buyers for a particular home come through all season. If you’re priced too high, that home won’t sell when they come through. On the other hand, if you reduce the price weekly, you might do 6 reductions between prospects!
August 24, 2010 — 9:13 am
Michael Cook says:
All,
This might be a silly question, but if price is the all important factor what do realtors bring to the table? Is their value in providing what the appropriate price should be?
Why wouldnt I choose a cheaper method of selling, if I am going to simply be told the price is the overriding answer? Why not go to a Redfin or some other intermediary and pay less to simply obtain market comps and price my house right?
In a down market dominated by price, is there tremendous value in hiring the best realtor or can I just save 2 – 3% by going some where else, “pricing right” and saving money?
August 25, 2010 — 11:23 am
Greg Swann says:
> but if price is the all important factor what do realtors bring to the table?
They should be bringing marketing and sales prowess, which in turn should result in a faster, more reliable sale at a higher price than an uncleaned, unrepaired, unstaged and unpromoted competitive listing might command. Which is to say: Welcome to BloodhoundBlog. 😉
August 25, 2010 — 11:25 pm
Benjamin Ficker says:
@Al Lorenz – Your situation is probably the best (and only) situation I can think. of that it does not make sense to reduce the price as quickly as everyone else.
@Michael Cook – Sellers ask that question a lot. My response is the same. Getting an offer is not the hard part, especially if priced correctly. Where my expertise, and where I earn my fee, is from contract to close. I usually give examples where when speaking with a FSBO (or even another agent) where their actions and what they say puts them in legal jeopardy. For example, one seller thought it was ok to tell us that he never has well issues. Then we find out (from the neighbor) he had water trucked into the property 2x a month. His property value dropped $300k from something he thought he would not have to disclose. Dealing with inspections, repairs, disclosures, etc. are where our experience matters. At the same time, if a seller is priced correctly (with our help) they won’t be chasing the market.
August 25, 2010 — 11:59 am
Ryan Ward says:
…as well as better photography to draw more interest, a clear understanding of the contracts, timelines, help with inspections and experience in negotiating the best deal once the offer does come in. Here is an example of some non-discounted photography on a single property website that you won’t get on a discount: http://www.estatesinmilton.com
August 26, 2010 — 4:14 am
Michael Cook says:
It does feel like there is some value there, assuming you find the right agent that can do all those things you all propose.
August 26, 2010 — 8:32 am