North Shore Views

The Odds of Selling Your Winnetka Home

If you are planning to sell your Winnetka home, chances are your real estate agent has shown you a CMA (comparable market analysis) to support her pricing recommendation.  Basically, a CMA shows you what similar homes in your neighborhood have sold for in the past few months, so that you know where you should price your home to get it sold.

I have found that a helpful supplement to a CMA is an analysis of how many real buyers there are at each price point. For purposes of this  exercise a real buyer is the same as a sold home. Thinking about it this way enables us to get our minds around how many real buyers there are out there in a particular price point, because if someone purchased a home they are certainly a real buyer. Taken together with the number of homes listed at this price, you can calculate the odds of selling your home within the next, say, six months. It’s an easy way to see the level of activity for every price point;  it’s also a good tool for determining your pricing strategy. It provides a pretty compelling picture of how moving from one price tier to another could dramatically improve (or hurt) your odds of selling.

Take the following as an example. The chart shows price tiers for Winnetka single family homes in $100,000 increments. Dividing the real buyers (homes sold) by the number of homes currently on the market, you can get a good sense of your probability of selling, depending on which price tier your home falls into.

In Winnetka, a home that is appropriately priced within the $900-999,000 tier has a very good chance of selling within a six month period (100% according to this chart). A home between $1,000-1,999,999 also has a very good probability of selling (75%). But get over $2,000,000 and the odds decrease significantly because there are more than three times as many homes for sale as there are buyers.

What that says is that if your home is priced in the low $2,000,000’s, you may want to consider rethinking your pricing strategy. Bringing it down to the next tier may be what it takes to get it sold. I recently advised a client whose house had languished for a year on the low end of that $2,000-2,999,999 tier to consider bringing it down to $1,999,999. Once they did, the house sold within two weeks.

Tags: Home prices

This entry was posted on Thursday, August 19th, 2010 at 4:44 pm and is filed under Real estate, Selling a home, Winnetka. 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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