Do those words bring back memories from your childhood school days? Were you one of those students that began searching for lost assignments the last week and began studying for that all important test so you could catch up and get that acceptable grade before your parents saw your report card? Perhaps you were organized and on-time and the reminder from teachers didn’t faze you much.
As the parent of two students in the school system I get these notices emailed to me so we can remind our children. It does bring back memories, although it seems my generation worried about grades and assignments just a little bit more than today’s kids seem to. I don’t recall having assignments not turned in, but my kids do, and other parents I talk to say the same thing.
Did you know that there are report cards in real estate too? One such grade you might want to pay attention to if you’re a seller is the Days on Market class.
As you can see from the attached chart, the average days on market for a foreclosure (REO) is only 33 days. This means they sell almost as fast as they come on the market. Buyers know it’s best not wait too long to make an offer on these properties or they’ll be gone in a blink.
The good news is traditional sales are down to 40 days on average. We have a shortage of homes on the market and a home that’s priced at the market will sell almost as fast as a foreclosure will. Short sales take a little longer, 109 days, as some buyers can’t afford to wait and see if the bank will take their offer. Some buyers need housing now and can’t wait for a yes/no/maybe answer for several months; all the while new listings hit the market and sell each week.
If you’re a seller and you see the average days on market is 40 days and your home has been on the market 200 days, it might be time to ask yourself some important questions. Your sale is failing the test. The market has not accepted what you’re doing.
It could be the marketing, the presentation, or the price. Of course, all the marketing in the world won’t sell a home that’s dramatically over-priced. Usually it is the price. If you’re going to pass the test, it’s wise to study the market and evaluate where your property stands in the market, not in your eyes as the seller but in the market’s eyes. It never mattered how smart I thought I was, what mattered was what the teacher thought. And believe me, the teacher’s thoughts mattered to my parents. There’s only so much fast talking you can do when the grades don’t come in.
You might ask yourself. Who am I fast talking? Am I selling myself on the value of my own home, or the buyer? If you’re selling yourself, you’re essentially buying your own home back at an inflated price. You wouldn’t do that if you were buying someone else’s home, so why do it to yourself? If the buyer’s aren’t buying and your home has been on the market a long time, you probably know the answer.
In school grading there is a district wide average and then there is a class average, and in real estate there is a county or city wide average and a smaller neighborhood or type average. This is important too. Perhaps $1 Million + homes take longer to sell, which they do. Golf course properties with high mandatory golf fees do as well. If your maintenance fee is high, that can add time. Be sure to compare the grades of like kind properties. Although, if you live in a home or community that has an average of 1.5 years to sell, you might want to price your home so it is the Next to sell, not # 14 on the list.
We hope this helps explain the Days on Market class grading system. If you have questions or considering selling your home, feel free to call us. 239-489-4042. We’ll be glad to help you get that perfect report card.