How to Appreciate Your Market Appreciation


Graph: Middle Tennessee List Price Versus Final Sale Price

We all know the feeling of shock and confusion when a neighbor lists their house WAY high.  “They want how much!?”  Middle Tennesseans know the market has been on a steady increase for the past few years, and some sellers can become overzealous in their asking price.  It’s typically these types of listings that spend years on the market with no offers, condemned to the listing graveyard that we call “expired & withdrawn.” 

Knowing those types of sellers are out there, it’s little surprise to see this visual graph that shows the average initial asking price of a home is somewhat higher than the average final closing price.  Sellers routinely test the market to see what profit they can rake in, however crazy their price may seem.  It’s these types of sellers that work without a deadline or timetable for moving, and they have the leisure of waiting and waiting for the right buyer to come along.  Inevitably, offers that do come in are significantly lower, which leads to major seller disappointment, and the house doesn’t go under contract (even if it did magically see a contract, the reality check of an appraisal would likely upset both parties in the process).  The listing grows stale as home shoppers see it online over and over again without any activity.  It’s the real estate equivalent of watching a delicious buttery biscuit become hard and moldy.  When the time comes for the seller to really want to move, the house is put back on the market.  But even if the price is now fair, the house has lost its unique luster because of the curious listing history that forever follows that home.  Buyers wonder, “Why didn’t it sell?”  And, “What’s wrong with it?”  Steeper discounts sometimes follow to entice an offer, at which point the asking price falls below fair market value, eating into the seller’s profit.  All that time spent trying to sell the house in greed is wasted, and now money is lost, too.  It is not a good situation for any seller to be in.

Although in today’s market, the most wise home sellers will use a qualified real estate adviser to determine their home’s fair market value, and then ask the agent to carefully list their home at just over that fair market value, leaving a little wiggle room for the rising market and buyer negotiations.  Smart sellers know that you get only one chance to impress prospective buyers when you list your home, and the best strategy to move on time is to allow your home’s list price to follow the natural upward market trend.  It’s not a market spike, but a slow and steady increase that can lead to a healthy profit and successful closing!  The fairly priced house passes its appraisal with flying colors.  The smart seller is satisfied with their home’s natural appreciation over time, earning them extra cash to roll into their next home.  And the wise home buyer has no qualms knowing they’re next home was purchased at the right price.

Chart created using data provided by RealTracs Solutions on April 10, 2018.  Middle Tennessee data includes the following counties: Davidson, Cheatham, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.


Kevin Martelli

Affiliate Broker, Realtor

Pareto Realty

4012 Hillsboro Pike No. 5

Nashville, TN 37215

o. (615) 502-2080

Providing real estate consulting services for friends and family in the Nashville area.

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Kevin Martelli

Kevin Martelli is a licensed and insured real estate agent serving the Nashville, Tennessee area. Kevin is a proud member of Greater Nashville Realtors. He is a Realtor and an Affiliate Broker at Pareto Realty, LLC.