My Real Estate Mojo, Real Estate Review

Since September 2005, the real estate market has been shifting from an extraordinarily strong seller’s market to a buyer’s. What does that mean? How can you tell? What difference should that make to you when selling your home? A little over a year ago inventory was low; if a home was placed on the market in good condition and priced slightly higher than the last one sold in the area, it went quickly (often within days/hours) and frequently with multiple offers. Not today. In recent months, inventory has been in abundance. A home in today’s market needs to be priced extremely well if not below last year’s price in order to sell in a reasonable amount of time. The average days on Market (DOM) has extended; consequently, a home may take longer to sell. This may impact moving plans, schedules and ultimately finances. Your Realtor will be able to provide projections based on history and current conditions which will assist in determining the optimal time to place your home on the market. Today’s market requires a seller to be more prepared and well coordinated once the choice is made to place their home on the market. The following are recommendations to place you in a stronger position to negotiate and how to possibly be smarter than the next seller you are competing against. Certainly, not all of these have to or should be used when selling your home. They are offered for informational purposes; you will need to determine your comfort level in using them.
CMA & Absorption Rates – Review appropriate Comparative Market Analysis & Absorption Rates for your area. Use this information as a tool in determining a strong sales price for your personal situation. (Not all Realtors are familiar with Absorption Rates.) If yours is not, request them to research calculations.
Stop Testing the Market & Sell! – Start off with your best price. So often sellers will start off high thinking they will test the market because they have “nothing to lose”. If the house doesn’t sell within the first month, then consideration is given to lowering the price. The problem is, you have lost one of the most valuable assets available, time. The first 2 weeks a home is on the market is referred to as the “golden time”. That is typically when the majority of potential buyers view the property; these are the people that have been out looking, seen what has been on the market and view your home as new material. After that time, generally only new buyers to the market come see the property. Consequently, showing a home looking its best coupled with a fair price initially will provide the optimal results, getting sold at a good price. If a price is lowered after having been on the market a while, buyers believe they can still negotiate lower because it has already been on the market and why not low ball the offer. It is also rare to get a person who has looked previously back into a home simply because the price has been lowered.
Court the Buyer – Placing your home on the market is an inconvenience at best. Traditionally, it is time consuming, difficult and stressful for the family. With all that being said, you still need to court the buyer. It may be really tough to let a buyer in on short notice or an odd hour; if at all possible, let it happen. You never know who the best buyer may be or when they are available. Don’t “assume” if they are really interested, they will call back. They haven’t seen your home to know they should be interested. A home undisturbed is a home unsold.
Don’t Sell the Way You Live – Recognize, understand & come to believe that the way you and your family have lived famously in your home doesn’t qualify it as preparation for selling your home. Once you place your home on the market, understand it is no longer simply a “home” but a commodity to sell. Consider what it takes to sell by placing a buyer’s hat on. What do they see when they pull up to your front curb? What do they see when they walk through the front door, and all other rooms in your home? Remember, we only get ONE chance to make a first impression!
Sunday Best – Inventory is high and buyers are having more opportunity to be selective. Position your home in its “Sunday Best” or Model Condition. In addition to the traditional sprucing up and removal of unnecessary items, you may consider the services of a professional stager. Studies have shown that homes enhanced by a RES professional sell 30% faster at a 13% higher selling price than comparables in the same area during the same time.
Keep Things Working - In today’s market, most buyers will request a home inspection to ensure what they are purchasing holds the sales value. Be proactive. Consider having a home inspection on your property prior to placing your home on the market. This will let you know what items may need attention and if there are any significant concerns that need to be addressed. Better to know a head of time before accepting an offer and thinking you know your “net profit”.
Consider Thinking Outside the Box – Instead of lowering a price on a listing, consider altering a transaction for a selling advantage. As an example:
HOA Fee Payment – Irregardless of whether you are a first time home buyer or one who has owned 10 properties, monthly expenditures are important. Consider offering payment of a year’s HOA or Condo fees.
Gas/Electric Fees – Again, get a reasonable “average” from the local utility company and offer to pay a year’s worth of utilities (or some other time frame). Thinking this is a lot? Determine what your “price concession” was going to be and work accordingly.
Buy Down Interest Rate – For many buyers, the ability to get into a home or the ability to afford a monthly payment based on personal financial ratios is key. Consider buying down a percentage point of an interest rate for a potential buyer. This could be the difference between being able to afford or not being able to afford your property.
Decorate a Room – Consider offering to buy a room full of furniture such as a dining room or living room.
Vacation – Consider offering a couple or family a weekend away. Sound ridiculous? This may be cheaper than the needed price reduction to attract a buyer.