3. Stale listing
Stale listing refers to properties with a high DOM, which means the house has been on the market for a long time. How long? It all depends on whom you ask and which market you’re referring to.
Some say a listing is considered stale after about 3-6 months.
So why are stale listings bad for sellers?
Even if the property is perfectly healthy, a stale listing can carry an unwarranted stigma that a brand-new listing does not have.
Buyers might believe they have more bargaining power and can get a steal on a house that’s been eating up time on the market.
Especially a buyer’s market, but even in a seller's market, sellers should be wary of letting that much time elapse before they adjust the price, because they will lose out to the new listing on the block.
4. Market value
A home’s market value is the price that a buyer is willing to pay and a seller is willing to accept on the open market. Market value is influenced by a number of factors, including location, supply and demand, comparables (aka comps), and a home’s physical characteristics.
A common tactic used a lot in the past two years has been sellers using the tactic of listing their house below market value to create a bidding war.
It can be great marketing strategy, but in a cooling market, buyers will pay what the market value is, and no more because they don’t have to.
Consult your real estate agent to come up with the most realistic and strategic listing price, and be sure to price it right from the beginning.
5. Earnest money deposit (EMD)
An earnest money deposit, or EMD, tells the seller that the buyer is serious. The buyer’s earnest money will go toward funding the down payment and closing costs.
The buyer gives the seller a deposit on the sale price. This demonstrates good faith in the sale transaction.
The timing of EMDs can vary by state. In New Jersey, a typical sales contract states that the EMD will be provided to the title company after 3-10 business days of the contract being signed. Generally, a smaller portion is sent out immediately and the remainer of the deposit is sent immediately after that. Specific dates are used, but if the check/transfer is a day or two late, the seller can simply agree that that's fine and the deal proceeds.