By Chad Taylor, the Taylor-Made Team
It’s truly about what buyers can buy today, not about what sold last year.
We’ve been fortunate to go on several listing appointments recently. On those appointments, I always ask sellers if they have a goal when it comes to list price. Without fail, homeowners begin listing the neighbors’ homes that sold last year.
I get it. I would do the same thing. But the danger is that many of those sales are no longer relevant.
It’s like assuming your Amazon stock is still worth $250 per share because that’s what it was worth last year. It’s not. Your Amazon stock is worth what someone will pay for it today. The same applies to real estate.
Our market was frenzied for a long time. Homeowners became used to looking at what a similar home sold for last year, adding 5 to 10 percent, pricing their home there, and then selling for that new number. And honestly, it worked. It was crazy.
That strategy worked because we had virtually no active inventory. Homes were selling in days, often with multiple offers. When a seller has no active competition, the only reference point a buyer has for “fair market value” is recent sales.
That has changed.
As inventory increases and buyers have more choices, they are no longer comparing a home’s price to what sold last year. They are comparing it to what is actively available right now.
This is why pricing strategy matters so much.
The market doesn’t reward precision. It rewards momentum.
What do I mean by momentum? Momentum is created when a home is priced in a way that generates early interest, showings, and urgency. It’s the buzz that happens when buyers feel like they need to act instead of wait. Momentum brings traffic, traffic brings offers, and offers create leverage for the seller.
When a seller prices strategically to attract buyers, not to squeeze out every last dollar, that strategy is often rewarded. Strategic pricing signals motivation. Motivated sellers attract motivated buyers. Like energy attracts like energy.
On the flip side, when sellers overprice their homes, they appear unmotivated or unrealistic. That tends to attract unmotivated, unrealistic buyers. Those buyers write low offers and create frustration instead of momentum.
Because we are carrying more inventory than we have in recent years, buyers are quick to judge listings based on days on market. If inventory continues to rise, the first 14 days on the market will matter far more than the next 60.
A listing is only new once.
Buyers are drawn to new listings. But if a home is overpriced, it can go from new to “market-tired” in two weeks. Then the question every buyer asks is the same: What’s wrong with that house? Why hasn’t it sold?
After 21 years in real estate, I can tell you the market really isn’t that confusing. More often than not, people just don’t like the answer.
And the answer is simple: a home is only worth what a seller is willing to sell it for and what a buyer is willing to pay. It takes both.
Buyers search for homes almost entirely online, and they are constantly being shown new options. That’s why it’s critical for sellers to understand their active competition—not yesterday’s market, not last year’s sales, but what buyers can choose from today.
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