Blake King with Big Earth Realty
One stat people worry too much about when planning to sell their home is the CDOM (combined days on market). The CDOM only provides a minor glimpse of the general state of the local market. It might indicate buying has slowed or that there are too many homes on the market, but it actually has no influence on how long it will take your home to sell.
The one thing the ‘combined days on market’ does imply is that prices are not increasing. They may be sitting flat or maybe even decreasing but the majority of sellers listing are starting with their listing price too high and they are waiting too long to make adjustments. And this is one reason why the number is practically irrelevant to an individual seller.
Most people look at the combined-days-on-market number and assume if they list their house it will take at least that long to sell. WRONG, you have to remember, the number is just an average based on the length of time it’s taking a portion of homes on the market to sell due to using the wrong approach. Remember, if the average CDOM is 60 there are still homes selling in 20-40 day range.
How do some homes sell in 20 days when the average is 3 times higher? The key to a shorter selling period is pricing correctly according to the market’s current condition and having a quick and nimble plan to adjust just right if you miss the mark slightly.
If you price your home for sale too high and don’t react accordingly you’ll only sell if your local market catches up. That can take a long time and it’s a terrible strategy. An average real estate market might see price improvement at 3% / year, so if you price your property even only 3% over its actual market value, in a market that’s improving at 3% / year, it will take approx 365 days to sell. In a market improving at less than 3%, your home could sit indefinitely priced just a little too high.
Will a house currently priced 3% too high even sell in 365 days in the Central Ab market right now? No, if all things remained the same, it will take longer. The Central Ab market isn’t experiencing annual price increases of 3% right now.
Will a home priced too high just take longer to sell if you wait? No, the homes taking a long time to sell only sell once price reductions happen. Unfortunately, because it’s a hard pill to swallow the owner makes price adjustments incorrectly and way too late. In the long run, this might even cause a home to sell lower than it should have.
The market doesn’t cause the CDOM to be high, sellers with the wrong approach do. The formula to sell in the 30-day range requires consideration of a few important variables and a specific plan.
Selling at the best price in a market with high a CDOM requires correct pricing and a quick redirect or if feedback indicates a change is needed.
Below is a chart showing the average “days on market” for homes listed in some Central Alberta towns Jan 2019. Rember, each is only an average and the smart sellers are selling much quicker.
There is a specific plan that will sell your home way quicker than your local average CDOM average and the plan isn’t just sitting with your fingers crossed. That’s why it’s important to use sold homes to compare with when planning your listing price. If you don’t price base on comparable homes having sold you’re making a mistake. You won’t trick buyers with the information available to them today.
Is there a specific way to find a buyer in a short time period without accidentally pricing too low and losing money? Yes, and I’ll share the simple formula that works quickly every time. Remember as a seller, it’s your choice which plan you use and if you see a property sitting on the market longer than 60 days, their main plan is just crossing their fingers. BigEarth.ca Realty also offers low commission rates to their clients. Enter below if you’d like more information.