The Effect of Listing Too High: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know

February 24th, 2012 categories: Lake Tahoe Real Estate

South Lake Tahoe housing: The Effect of Listing Too HighHelping the South Lake Tahoe, CA Home Seller sell their house (pt 5)

One of the things we do is provide as much information as we possibly can to help a South Lake Tahoe, CA home seller sell their house. To be successful at that there is much a seller needs to know, comprehend and ultimately accept. This is the last in a five-part series to help all home sellers.

In general, and this is the bottom line, a seller needs to price their house properly to sell it successfully. To do that, one has to be informed, or fully market aware. It is market awareness that helps prevent a home seller's biggest mistake: listing their house too high.

When a home seller lists their house too high, it costs them time and money. This series will detail exactly how much time and how much money listing too high costs.

A summary of all of the Top Five things a Seller needs to know is found below.

 The Effect of Listing Too High :
This post is a focus on the last of the top five things a home seller needs to know. The Effect of Listing Too High is an exact look at how much time and how much money a home seller loses from listing their house for sale at too high a price.

Heretofore, a real estate agent will often tell a seller that they will lose money if they list to high, but they rarely if ever show a seller what that might be precisely. We do that for every seller we encounter, down to the number of days and dollars lost. This gives a seller detailed help to increase their chances of selling success, and how to get the most for their house as possible.

We will use the sq ft size of median sold South Lake Tahoe, CA house for this study. As of right now, that the median sold price is $225,000 and the size of that house is about 1,500 sq ft, so lets look at the effect of listing a 1South Lake Tahoe house in that size range too high.

 The Sold Price Difference : (including distressed properties)
Here's the effect listing too high has on the price of homes sold in the last 365-days in the 1,500 sq ft size-range:

  • Homes that are listed too high sell for $15,000 LESS.
  • Homes listed reasonably sell within 90 days or less sell for an average of $246,500.
  • Homes listed too high sell in 180-days or more sell for an average of $231,500.
  • (If your house is in a different size range, contact us and we'll do this same work-up for you.)

 The Sold Price Difference : (NOT including distressed properties)
Here's the effect listing too high has on the price of homes sold in the last 365-days in the 1,500 sq ft size range:

  • Homes that are listed too high sell for $27,500 LESS.
  • Homes listed reasonably sell within 90 days or less sell for an average of $288,500.
  • Homes listed too high sell in 180-days or more sell for an average of $261,000.

 

 Days on Market Difference : (including distressed properties)
Here's the effect listing too high has on how long it took to sell the 1,500 sq ft South Lake Tahoe house in the last 365-days:

  • Homes that are listed too high in this size-range take an average of 270 MORE days to sell.
  • Homes listed reasonably take an average of 58 days to sell.
  • Homes listed too high take an average of 328 days to sell.
  • (If your house is in a different size range, contact us and we'll do this same work-up for you.)

Days on Market Difference : (including distressed properties)
Here's the effect listing too high has on how long it took to sell the 1,500 sq ft South Lake Tahoe house in the last 365-days:

  • Homes that are listed too high in this size-range take an average of 270 MORE days to sell.
  • Homes listed reasonably take an average of 58 days to sell.
  • Homes listed too high take an average of 328 days to sell.
  • (If your house is in a different size range, contact us and we'll do this same work-up for you.)

 

 List Price Difference :
Here's the difference in the average list price of homes that were listed reasonably that sold quicker for more compared to homes that were listed to high:

  • Homes in this size-range that took longer to sell that got much less were listed an average of $41,500 higher.
  • Homes that sold quicker for more were originally listed for an average of $257,500 .
  • Homes that took longer to sell for less were originally listed for an average of $299,000.

 Sold Price per Sq Ft Difference :
Here's the difference in the average sold price per sq ft of homes that were listed reasonably that sold quicker for more compared to homes that were listed to high:

  • Homes that sold an avg 270 days quicker for $15,000 more sold for an average list price of $170 per sq ft.
  • Homes that sold an avg 270 days more to sell for $15,000 less sold for an average list price of $166 per sq ft.
  • In other words listing too high, in addition of take some 9 months more to sell, actually sell for $4 less per sq ft.

 List Price per Sq Ft Difference :
Here's the difference in the average list price per sq ft price of homes that were listed reasonably that sold quicker for more compared to homes that were listed to high:

  • Homes that sold quicker for more were listed at an average sq ft price of $177.
  • Homes that took much longer to sell for less were listed and an average sq ft price of $212.
  • In other words listing too high, in addition of take some 9 months more to sell, actually sell for $4 less per sq ft.

 

 Differences in Bedrooms, Year Built and Distressed Properties :
Here's other characteristics of houses sold in this size-range in the last 365-days:

  • Houses in this size-range in this study have no difference in the average number of bedrooms; it's 3 BD for both!
  • Houses in this study have little difference in the average year built; it's only 3 years. (1974 for homes that sell quicker for more; 1971 for homes that take longer to sell for less.)
  • There is a 5% difference in the incidence of distressed properties of homes sold in this size-range in the last 365 days. (56% for homes that sell quicker for more; 51% for homes that take longer to sell for less.)

 

 The Listing Price Bottom Line :
Here's what the market is telling a home seller about listing a house in this size-range:

  • If you want to make more money, and sell quicker, do not list above $257,500.
  • Do not list for more than $177 per sq ft.
  • If your house is the nicest house in town in this size-range, please contact us.

 

 Thinking like a Home Seller :
Based on this information, here are some thoughts a home seller might consider to sell a home in this size-range.

  • 1. In today's market I must price my house properly to get the most for it possible.
  • 2. Pricing my house properly also causes it to sell much quicker (an average of almost 9 months quicker in this size-range).
  • 3. I must calculate all monthly house costs as part of my listing strategy. If I list too high I must add nearly 9 months of my house costs into consideration.
  • 4. If I do not have the nicest house by far in my size or price range, I must make it's listing price as attractive as possible to today's deal conscious home shopper.
  • 5. To best price my house, I should consider its characteristics by price and by size, which are included in this series.
  • 6. I should also look at my odds of selling, and seriously consider if my house is the one I would buy today against all competition in its size-range.

Summary of the  top five things a home seller needs to be aware of are:

1. Absorption Rates
This informs a seller about market demand; it identifies a seller's competition, tracks the number of competitive sales a month and pinpoints how long it will take to sell the current inventory in a seller's price-range.

2. Characteristics by Price
This informs a seller about current home prices by examining the key characteristics of a house over time.

3. Characteristics by Size
This helps a seller develop a listing strategy by examining key characteristics of a house based on comparative size.

4. The Odds of Selling
This helps a home seller fully understand their odds of achieving success over time.

5. The Effect of Listing Too High
This exactly identifies what it costs a home seller to list their house too high, both in terms of time and money. The results are both stunning… and a great savings for the South Lake Tahoe, CA homeowner.

Posts in this Top Five Things a Seller Needs to Know series:

Feb 21, 2012: (Pt 4) The Odds of Selling: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 20, 2012: (Pt 3) Characteristics by Size: one the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 18, 2012: (Pt 2) Characteristics by Price: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 16, 2012: (Pt 1) Absorption Rates: one of the Top Five Things a South Lake Tahoe Home Seller Needs to Know
Feb 14, 2012: Intro: The Top Five Things a South Lake Tahoe Home Seller Needs to Know

A few more Lake Tahoe Real Estate Blog posts about House Characteristics:

Feb 10, 2012: Characteristics of the Median Sold South Lake Tahoe House
Oct 19, 2011: The South Lake Tahoe House Now and Then

Some of our videos you may enjoy:

Jul 5, 2011: Awesome Fireworks Finale: South Lake Tahoe, July 4, 2011
Dec 9, 2010: How to find and use our Bolero Button… and why you should.
Oct 20, 2010: Bijou Neighborhood video
Sep 28, 2010: A South Lake Tahoe Indian Summer
Sep 23, 2010: Emerald Bay Treetops… and a Bald Eagle
Sep 16, 2010: Walking on Water… South Lake Tahoe Style
Sep 11, 2010: Al Tahoe Neighborhood video

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This entry was posted on Friday, February 24th, 2012 at 4:19 pm and is filed under Lake Tahoe Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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