I have written before that 4 days on the MLS is the right amount of time to get the highest price for your home. That was based on an analysis I did several years ago, so it’s time to do a new analysis.
Looking at the 4,015 most recent sales in Jefferson County, here’s what I discovered.
Roughly 5% of those sales showed zero days on the MLS, meaning that they weren’t even exposed to agents or the public until they were under contract. The median ratio of sold price to listing price for them was 100%. Some sold for over the listing price and some for less, but the median was the listing price.
Meanwhile, 200 homes went under contract after being on the MLS only 1 day. The median home for this group sold for 3.03% over its listing price.
There were 379 homes that were active on the MLS for 2 days before going under contract. The median home in that group sold for 3.08% over its listing price.
502 homes went under contract after 3 days on the MLS. The median home in that group sold for 3.3% over its listing price.
The highest number of homes, 608, were active on the MLS for 4 days before going under contract. The median home in that group sold for 3.6% over its listing price.
As in my prior analysis, being on the MLS for 4 days netted the highest price for the seller.
413 homes went under contract after 5 days on the MLS. The median home is that group sold for 3.3% over its listing price.
Another 206 homes went under contract after 6 days on the MLS, but the median home in that group sold for just 1.6% over listing price.
Skipping ahead to the homes that were on the MLS for 10 days before going under contract, the median home in that group sold for 0.4% below the listing price.
Those statistics are displayed graphically on the chart above. Not shown in that chart is how low the ratio of sold price to listing price went for homes that languished on the market, usually because they were overpriced at the beginning. Here’s that other data:
223 homes were active on the MLS for 30 to 45 days before going under contract, and the median home in that group sold for 3.8% below the listing price. Looking at the 106 homes that were active on the MLS for 46 to 60 days, the median home in that group sold for 4.3% below listing price.
Lastly, 285 homes were active on the MLS for over two months. The median home in that group sold for 5.7% below the listing price.
The lesson for sellers is that you need to price your home to attract multiple offers and not accept the first (or second) good offer that you receive. Four days is the right amount of time, with proper marketing, for all potential buyers to learn about your home and enter the competition for it.
Selling it without making it active on the MLS at all, as too many sellers are currently doing, may be convenient, but it likely leaves money on the table.
There’s another way that sellers leave money on the table, and that is to hire a listing agent who uses the “highest and best” approach to handling multiple offers. It is the most common method used, but the agents of Golden Real Estate use a better approach — being open and transparent, handling bids auction-style.
The auction style of handling multiple offers is simple, but it does require more work by the agent and more patience on the part of the seller. Buyers and their agents appreciate this approach — and sellers are likely to net more money.
I have a good example from last week. I listed a home for $595,000 and got it under contract for $725,000, and I did it with only four bidders. If I had asked for “highest and best,” I would have had many more offers, and maybe the highest and best would have been $625,000 or maybe $650,000. But because I let every agent know the details of every offer I received, I received fewer offers, and those I did receive knew when their offer was exceeded by another offer. At that point they could either resubmit or drop out.
This process truly resembles a public auction, in which everyone knows where they stand and can choose to raise their bid or drop out. No one is blindsided. The worst thing for a buyer is to discover later that if they had only offered a little more money they could have purchased the home they wanted.
It’s hard for me to understand why listing agents won’t reveal their highest offer to other agents. There is no rule against it, but some agents seem to think there is. Some agents claim that their seller doesn’t want them to reveal details of the offers in hand, but I don’t believe that. And if it’s true, then the seller wasn’t told about the advantages of the auction style of managing offers.
If you want to get the most money for your home, use an agent like those of us at Golden Real Estate who are willing to do the extra work of handling multiple offers auction-style.