Location, Location, Location - The real estate home seller fallacy

Most Illinois home sellers have heard and believe the fallacy that “location, location, location” are the three rules to real estate that home buyers follow. This does not hold true for home sellers. The three rules for selling your home in any market are:

• Pricing
• Condition
• Location

These rules are what really drive home buyer interest and purchases; however, they are in order of what you can control. You can no longer control the location of your property, but you can control the condition and pricing. If you wish to increase the value of your home, you can improve the condition. Bowers Realty Group agents will instruct you on the improvements to make to your property to increase your selling price or decrease the time it takes to sell your home. (Don’t waste your time and money on home improvements unless you know that they will decrease the time to sell your home or increase your Return On Investment – ROI)

Location and Condition Drive Price – Price is What Drives Home Buyer Interest And Home Sales

Realtors in Illinois often make the mistake of letting a home seller set the price for their home sale. This usually occurs when a home seller says one of the following:

• “Let’s just start out at a higher price and see if we get any offers. We can always lower the price later.”
• “Let’s just start out at a higher price. Someone may still write an offer for a lower price even if we are priced too high.”

Why don’t these two home owner developed “pricing strategies” work?

If you price your home too high, you will miss out on the home buyers who will actually buy your home. Home buyers have their searches setup to show them newly listed homes that fit their price criteria. If you are priced too high, you won’t be “advertised” to the actual buyers for your home. Their automated searches will eliminate your home based on the high price.

Aside from potential home buyers not seeing your home because it is never advertised in their searches (detailed in point 1), potential buyers and their realtors compare homes priced at each pricing tier. A half-way decent real estate broker will advise clients interested in putting a low offer in on a too high priced home to look at other homes in that same pricing tier where they can get “more for their money.” If your home is priced too high, you will never be advertised to the people actually interested in buying your home and your home won’t be able to compete with other homes listed in the higher pricing tier.

The vast majority of buyer interest and showings of your home will happen in the first two weeks it is listed. This is extremely valuable time. You can’t afford to have a friend/family friend/ “recommended IL Realtor” list your home if it is at the wrong price. All home buyers have their searches setup to show them newly listed homes that fit their price criteria. If you are priced correctly, you will receive a lot of interest in the first two weeks! If you miss this window, your home will take much longer to sell, if it ever sells.