When is the "Best" Time to List Your Home For Sale?

"When is the best time to list my home?" I get asked this question on a pretty regular basis throughout each year. My answer is usually, "It doesn't matter when you list your home as long as it's spruced up and it's priced well." It's true that real estate listings and sales follow yearly trends fairly consistently, e.g. more homes are listed in April and May than in November and December. But consider the following argument for listing your home in November instead of May.

Listing your home in April and May can statistically hurt your chances at getting top-dollar for your home due to the increasing spring inventory and stiff competition. There is also the added inconvenience of having a large number of unqualified buyers traipse through your home with an unsuspecting agent, aka "tire-kickers" and "looky-loos." Alternatively, listing your home in November and December, a time when many sellers take their homes off the market if it didn't sell over the summer, can increase your chances of a quick sale due to decreased competition. Not to mention that buyers who take the time to look at homes around the Thanksgiving and Christmas Holidays are typically very qualified buyers.

As you can see, there are pros and cons no matter what month of the year you choose to list your home. But the fact remains that homes in all price ranges sell all year round...when you hire the right agent, that is. Happy selling!

Why won't buyers just make an offer on my home?

Consider the following scenario. 

You list your home for $395,000, knowing full-well you'll take $350,000. But you want to "leave room for negotiation" since everyone knows buyers will want to negotiate. Four months later, 25 to 30 buyers have traipsed through your home, left very little feedback ("not the right layout, thanks!"), and you've received no offers. You call me because you're considering changing brokers. During our meeting, I recommend that you reduce your asking price to $359,000 or perhaps $355,000. Then you ask me the most notorious question of them all, "Jeff, why would I reduce the price? No one has commented that my home is over priced. Heck, no one has even made me a low offer?" 

I've typically answered that question by saying something like, "The buyers have been telling you your home is overpriced, you just haven't been listening. Being on the market for 4 months with no offers screams that your home is overpriced for the location and condition it is in." I would wager that only 50% of the people I've told this to actually believe this line of reasoning. Why isn't it as effective as I'd like? Because it sounds like a sales pitch brokers have been trained to give sellers after 30 days, then 60 days, then 90 days, etc. But it's the truth. 

And then I read this article titled "5 Tips Buyers Would Give Sellers If They Could," and I really liked this broker/attorney's answer to the very question posed above. I plan on using her (edited) answer below from now on. 

"You might be thinking the best plan of action is to list your home high, planning on the fact that prospective buyers will want to bargain the price down, and it is true that most buyers expect to engage in some basic negotiation. They are not, however, interested in correcting your belief system about your home and its value, which are clearly not based in reality. Buyers invest a lot of time, energy and emotion in making an offer on a home. So, if your list price is so bizarrely above market value that the chances of coming to a meeting of the minds on the price are slim, the buyer will simply pass and move on to the next home without giving your home a second thought. 

If your home is dramatically overpriced compared to the others in the area, most serious home buyers in the market for a home like yours will either (a) never come see it, because it doesn’t show up in the price range they are searching online, or (b) not come see it unless and until you drop the price, because it simply isn’t worth their time and energy until you correct your pricing into the realm of the realistic."

Dallas Is, Like, So Popular!

Dallas seems to be on quite a few real estate "Best Of" lists lately. Just last week Forbes ranked Dallas as one of the Top 10 towns in America for emtpy nesters. Only a few days later Homevestors (We Buy Ugly Houses) ranked Dallas as the #1 city for real estate investing in the country!

Someone should tell our fair city that we're in great shape compared to the rest of the country. At the same time, those of you who are smart enough to take advantage of our large supply of homes and unusually low interest rates are probably happy everyone is sitting on the fence waiting for "better days".

Note to waiting buyers: "Better days" = higher interest rates and less inventory to choose from.

Buyers Are Buying. Wanna Know Why?

The reason according to Blanche Evans of Realty Times is simple.

"Consider that home prices [across the country] in February 2007 were $213,500 and interest rates for the month averaged nearly 6.5 percent. In 2008, prices are $195,000 and interest rates averaged 5.9 percent.

So it shouldn't be surprising that housing inventories have dieted down to a 9.6-month supply from over 10-months on hand in January."

Make perfect sense to me. Mortgage rates are low, low, low and there's plenty of inventory to choose from. I also think seller's are beginning to get a little more realistic with their asking prices. These are all ingredients for a market upswing.

Buyer's Market Myth

In many markets across North Texas there have been less sales so that must mean the buyers are hibernating, right? Wrong. I heard this a lot in the latter months of 2007 from seller clients and even other Realtors saying showings have died down on their properties and the buyers had all but disappeared. Please allow to me to squash this myth for you. Pay attention students.

The orange triangle above represents the buyer pool (according to this myth) and how the pool shrinks during a buyers market which is why there is so much inventory on the market. With all those listings on the market there can't possibly be enough buyers to go around, right? Not if the price is right. This is tough news to swallow for many sellers but reality is that the buyer pool never changes. Buyers are always willing to buy IF they perceive the home's price as valuable. If buyers feel the home is over priced they will simply pass. And we've already learned that buyers don't " just make offers" willy nilly because you, the seller, over priced your home to leave room for negotiation.

Think about it. If I listed a single family home in good condition in University Park for $400,000 I will receive 5 to 10 offers within the first 5 hours on the market guaranteed. This example shows there are always many buyers ready and able to buy, thus, the buyer pool size never changes. They just need to perceive the home as valuable in order to make an offer.

So what does this tell us about our current market which admittedly has more inventory than last year? (But certainly at very healthy levels) It means most of the listings currently on the market are not priced correctly and thus buyers are not willing to make an offer.

To summarize, the buyer pool never changes. Every listing currently on the market has an "energy price" that will cause buyer's to act. Your Realtor should be able to help you find this price which will, in turn, allow you to maximize your sales price while minimizing your time on the market. And when homes are priced attractively and sell quickly, you end up with less inventory and an appreciating market.