Despite all the positive growth in the Las Vegas and Henderson real estate market over the couple of years, positioning a home correctly from the start is as important as ever. In fact in today’s market, it’s more important than ever. The last thing a seller wants is to have their property sit on the market for months on end and become a stale listing.
Home owners sometimes don’t like to hear this, but aggressive positioning from the start is one of the best ways to get under contract quickly here in Las Vegas. In any market, buyers still place a heavy emphasis on value (perceived or other.) Potential buyers often look at price first and everything else second. All those amenities may be nice, but what’s the asking price again?
What do you mean by aggressive?
Before I go further, I want to point out that “Aggressive” in this case, does not mean “below market.” Not by a long shot.
While a seller may be stuck on a particular price, they also may get stuck with a property that doesn’t sell. Aside from the buyer’s psychology, it’s also important to factor in the carrying costs while a home sits on the market. Possible mortgage payments, insurance, taxes, and HOA fees are true costs when factoring the net proceeds of a Las Vegas home sale.
For those who are able, “under pricing” a property by 3-5% will not only make it more competitive, but could possibly create a bidding situation. At the very least it will take a lot less time to sell and appeal to a much larger pool of buyers in the Clark County. Let me explain what I'm talking about below.
Run the numbers
For instance when positioning a home, I generally like to look at the price per square foot of sold properties inside the last six months. Lets say comparable homes in North West Las Vegas are selling for 130 per square foot, but the average asking price is 135 per square foot, I suggest the owner list their residence at 130 per square foot. This is hard to look at in terms of raw dollars, because it appears that is much lower than competing properties. But that’s the point entirely. It’s more alluring to potential buyers because it’s perceived as a deal, but in reality you’re asking (and getting) full market price. I’ve done this for years with much success and quick results, regardless of market conditions. It was especially effective when housing started to drop a few years back. I’ve also sold all of my personal and investment properties with this method.
Obviously in our latest seller’s market, this method would have been irrelevant, since homes were often selling for more than original list price. Lately though we have begun to see sale-to-list price ratios under 100% again. Keep in mind too that the market data has shown that the median home price here in Las Vegas has stayed consistent over the last 9 months or so. Inventory may be low, but in terms of asset prices, they remain stable.
What is sale-to-list price ratio?
A sale-to-list price ratio is exactly what it sounds like. You take the final sale price and divide that by the list price, and then express it as a percentage. So if the sold price of a home was $150,000 and the list price was $155,000, then the sale-to-list ratio would be 97%. Similarly if the sold price was $150,000 and the list price was $145,000, then the sale-to-list ratio would be 103%.
Conclusion
Given the recent trendlines for the Las Vegas real estate market (median price holding steady, and sale-to-list ratio dipping) I believe this would be a great time to implement such a strategy. Overpricing a property will most certainly rain on your parade.