As a home seller, you might be tempted to set your initial list price at an unreasonably high valuation. The thought process behind this usually goes something like, "I'll aim high and can always reduce the price if it doesn't sell." While this might seem like a low-risk, high-reward strategy, the reality is exactly the opposite; in fact, you could be inadvertently dooming your home sale by neutralizing buyer interest from the start. A new study by Redfin showed that most buyer interest in any home listing comes in the first few days on the market and rapidly falls off. Even when the listing has a subsequent price drop, that initial burst of interest is never recaptured, meaning the consequences of an unreasonable listing price can't be undone.
Redfin looked at the number of pageviews that home listings received per day on their website in order to track how buyer interest changed over time. By indexing the pageviews for a given listing on day 1 at a value of 100, it became easy to see how buyer interest in a typical home changed over the life of the listing. What they found was that pageviews dropped by about half from day 1 (100 views) to day 2 (51 views), then dropped by about half again by day 7 (25 views) before leveling off. By day 30 on the market, a typical home listing received just 17 views.
This data shows that buyer interest in a home rapidly drops off in the first few days on the market. As stated by Redfin chief economist Daryl Fairweather, “Fair or not, buyers judge a home by how many days it has been on the market. A home that has been on the market for more than a few weeks has a scarlet letter on it, and buyers will wonder why no one else wanted to buy it."
At this point, we've established why the first few days on the market are so important, but you might still be thinking that you can recapture that buzz by dropping the price; after all, everyone notices those little "price reduced" tags when browsing listings, right? Unfortunately, this is not the case. Redfin also looked at the amount of pageviews occurring each day after a price drop and found that there was only a small bump in views on the first day (29 views). More shocking is that views on the second day of a price drop fell to just 18, about the same as they were after 30 days on the market at the initial price! This small, brief increase in views is likely the result of a few new buyers seeing the home appear within their search range, rather than renewed interest from the original, larger pool of buyers.
Taken together, these findings should make it obvious that pricing your home fairly from day 1 is critical if you are serious about selling your home. If you would like some help with the selling process, including finding the right listing price, contact one of our amazing agents today!
