Seattle Real Estate Market | 1 Secret EXPOSED!

Want to hear a secret about the Seattle housing market? It’s something shocking, and nobody is talking about it. According to the Northwest Multiple Listing Service, 1 out of 7 homes in the Seattle area is selling BELOW the original list price.

You don’t hear much about this do you? That’s because we are in this extreme sellers’ market. The 71% of homes that sell ABOVE the asking price get ALL the news and attention. Of the remaining 29% of homes NOT selling above the asking price, half sell at their original list price, AND the other half actually sell BELOW the asking price. So, what does this mean for you as a Buyer or Seller? Stay tuned to find out!

Buyers, listen up, if 14% of the total homes sold are selling below the asking price, you can use this to your advantage. And Sellers, it’s important for you to know how to navigate this if you are found in a situation where your home isn’t selling. When do you hold out vs adjust the price? Stick around to find out.

Generally speaking, when a home is properly marketed, but NOT selling, it comes down to the price. 

But what if it’s a dated home?

If the price is right, it will sell. 

But what if it’s a small home? 

If the price is right, it will sell. 

How about if it’s an unusual home with unique attributes? 

Again, if the price it right it WILL Sell. 

Regardless of the location, size and condition, ALL homes sell for the right price. There are SOME exceptions to this, and we’ll talk about that in just a moment. But first, here are a few signs and general rules indicating the list price is too high and a price adjustment is necessary for a sale to occur.

1.       The home receives very few or possibly no showings AND no offers within the first 2 weeks. With few exceptions, in order to sell a home, people need to preview it. If buyers are NOT previewing the property, it most likely won’t sell at the current list price.

2.       The home receives showings, possibly a LOT of showings, but no offers. This is an indication that the list price COULD be closer to the actual market value, BUT it’s likely to still be a little overpriced.

3.       The home receives showings BUT gets low-ball offers. Obviously, this indicates the market sees value in the property, because there are offers, but at a reduced price.

Now these are GENERAL rules and guidelines. However, occasionally, there are times when staying the course and NOT adjusting the price can benefit you.  

Here is an example of a home we recently listed. It’s a cool property in the heart of the city. The sellers did a great job preparing the home. And we did a great job marketing it with pictures, staging, and even an awesome promotional video.

Of course, before going on the market we did an in-depth comparative market analysis and presented the data to the sellers. After examining the information, they decided, and we supported, a list price of $1,285,000. Out of the gates we received a lot of showings. In fact, 38 showings.

PRO TIP, on average for every 7 showings, a seller should receive 1 offer. Again, this is just the average. This number will fluctuate a lot, depending on the property. But it does gives you a general idea.

So, we were getting a lot of showings on the house but no offers. 2 weeks into our listing we finally did get an offer. But it was at 1 million dollars. $285,000 less! Or about 22% less than the asking price. Our seller didn’t even bother with a counteroffer as it was too far off the list price.

Fast forward 2.5 weeks, there were several days when we didn’t have a SINGLE showing. In a market as HOT as this, you KNOW most homes are selling in less than a week and ABOVE the asking price, so this was discouraging to say the least, and an indication that the price might be too high. Why didn’t the sellers panic?

Because, we had done our homework upfront, and we knew this home had a couple of unique challenges which would not appeal to a large segment of buyers. The biggest challenge regarding the property is that it doesn’t have any garage or off-street parking. After finding parking on the street, you have to walk up a lot of stairs to get to the front door. Most buyers just aren’t ok with this inconvenience. I mean, how many of you want to park a block away and carry groceries up a bunch of stairs when it’s raining?

At the 3-week mark, we received another offer. This time, at $1.2 million. $85,000 less than the asking price. I quickly called the buyers agents who had shown the home to try and encourage a second offer. And that worked. The second offer we received came in at $1,250,000. Ultimately, after a couple rounds of negotiating between the 2 offers we got the home sold at the FULL list price of $1,285,000, no inspection contingency and a quick closing. SUCCESS! And our sellers are VERY HAPPY!

With so many showings and no decent offers, why didn’t the seller drop the price sooner? The short answer is, we had JUST enough supporting evidence – based on the buyer and agent feedback – to hold off a little longer before dropping the price.

So, the question becomes how do you know if and when to drop the price? Sellers, here are 3 key points for you.

1.       The first is, the market doesn’t lie. It doesn’t matter what you hear in the news, or even what the neighbor’s house sold for. What really matters is how buyers perceive value and respond to YOUR home. It isn’t until a home is ACTUALLY listed that you find out the truth about how the market will respond. Sometimes the market response is better than anticipated, and sometimes it’s not.

2.       It is so crucial to get DETAILED feedback from every agent and their buyers regarding the property. We regularly reach out to any agent after they preview the home to get their honest feedback. We need to hear it. The good, the bad and the ugly because it’s the market data in real time. With regard to our example, we got the feedback saying the lack of parking was the problem and a deal killer for most buyers. But we also got feedback saying that it’s a cool property with a lot of features and benefits, and the price wasn’t off by much for the right buyer. Ultimately, after speaking with the sellers we came to the conclusion that holding off a bit longer before considering a price adjustment could be prudent in order to find that unique buyer. And it paid off! Now, this can be a VERY slippery slope. And that leads to point number 3.

3.       After examining the data, don’t be afraid to adjust your price down, IF that’s the best course of action. Sellers can actually do themselves a disservice by not dropping the price soon enough if that is what the market indicates. The specifics and details of each scenario are different. So having experienced and skilled agents to navigate this gray area is crucial. There is a STRONG correlation, the longer a home sits on the market the weaker the offers become.  

Buyers, here is how YOU can capitalize. If you keep getting beat out on multiple offer situations, then try another approach. Try submitting your offer before the review date. OR, related to what we’ve been talking about, identify homes that haven’t sold after a week or more and are lingering on the market. You usually won’t have to worry about some big bidding war and this gives you a better position to negotiate price and terms. Heck, you may even get the possibility of buying the home for LESS than the asking price. Nobody else is reporting this.

If you find it interesting that 1 out of every 7 homes in the Seattle area is selling for LESS than the original asking price, then please be sure click that like button. Then Smash the subscribe button so you can stay in the KNOW regarding the greater Seattle real estate market.