Sellers and world... I can't fool you! We are in a soft market and there are just some things that we need to work on to "drop the denial" and come to grip with the fact that we have to work harder at preparing, listing, marketing, negotiating and accepting "what it be like".
Before you stop reading and think that this is going to be a downer.... keep reading. This is an attempt to emphasis the fact that there is work to be done, but it can be done - to be able to smile and say "The Price is Right!"
What is pricing all about in a buyer's market? Is your listing price running your buyers away? Are you missing the point?
The Price is Right?? or is it? Things you should do to price right: 
- Know that pricing is about supply and demand - right now the MLS is proof that there is plenty supply by the number of listings that are sitting there collection DOM (days on market).
- Master the art and science of pricing - this is a moving target in this soft & falling market
- Know your neighborhood comps - ask your agent to go over the comps with you. Be clear in what your property has that the other properties that are listed have (this includes: Active, Sold, Expired, Withdrawn, and Pending).
- Let your real estate agent help you out. They have the experience to compile the following facts dong the following (and more....)
- * Check for days on market (DOM)
- * Check & compare for original listing price / compared to final sale price
- * Check & compare price reductions
- * Check & compare final sale price
- * Check for actual sold price
- * Check & compare adjust pricing for differences in lot size, upgrades, other amenities, etc.
- * Check & compare why each did not sell and what does each property have in common (compare similiar houses in the neighborhood - 1/4 to 1/2 radius; check physical barriers and dividing lines - such as major streets, freeway, RR; similar ages and square footage.
- * Check to see what agency listed the property
Things to remember - Buyers gravitate towards:
- Properties that are a deal to them
- Location, location
- Incentives: Can improve the chances of selling at a good price
- In a good condition to where they do not have to wonder if the deal is really a deal!
- Pretend that you are the buyer and use the "treat others as you would want to be treated" attitude.
- Price reductions are done if the market warrants a reduction
- Remodeled for aged properties (kitchen, baths, windows, floors, etc)
- Homes that do not have a long list of repairs (either major or minor repairs have an effect)
- Move in condition homes
These are few tips that will help you price your home just right for the market at the time of listing. Keep in mind that the market is changing downward at a fast pace, so listen to your agent about where the market is and take their advice on if you should consider lowering the price if the market so warrants this to be done to keep up with the competition and the market.
Short sales work the same on the pricing. Listing agent should be upfront and honest about the market value to the seller, the seller and listing agent should both know that the market changes are major factors in the listing price and whether or not a fair offer will come in and impressed the lender enough for short sale approval.
the Mother and Daughter Realty Team @ Evolve Realty Group - 866-750-8282
www.motheranddaughterrealty.com
Rosemary:
Good tips on motivating the buyer to make an offer.
Rosemary........
Thanks for the well written post with some very good tips and advice.
Have a great day!!
Good points, but here's one more trick to get the seller to see the light. If in a given market it will take 8 full months to sell all the houses currently on market - then in order to sell a specific property in say 4 months, you need to take the absorption rate into account. In the above scenario we know that only 50% of the houses will sell in the next four months. To price a home correctly, the asking price would have to be in the lower 50% of the price range for similar "active" properties (not "solds") on the market in order for it to sell in half the time.
It's a simple concept, but it works - and you can show your seller the math in black and white.
Rosemary - I assume you're talking about short sales.That's the beauty of absorbtion rate, the financial gurus get it. Time is money. If you can show them how to shorten the time on market they will quickly calculate how much they will save, especially if they don't have to go through the foreclosure process. CMA's are very important - but they are necessarily based on "solds" and are subjective in nature. A good AR analysis will give you an evaluation of the "actives" - your true compitition - and is completely objective. Armed with a CMA and an AR, as well as all the other great weapons you've already talked about, you and your seller will have an up to the minute picture of the market with which your faced.
Just food for thought, and another area in which to show your expertise. Keep up the great blogs.
Jack - This information is for both short and regular sales. But especially short. the actives are a good source in many ways But to me the actives can hurt alot because they are usually higher than what the properties are really worth -- especially during this time. The lenders of short sales are looking at the actives and basing what the value of the properties that they have request for short sale and determining that the lower offers are way off and usually they are not. The condition of the property is not something the lender care to take a look at in most cases.
Thanks for the feedback. I will incorporate it into my stragetic negotations with the lenders and the sellers. I appreciate your stopping by.
Rosemary,
You are right on! If folks really want to sell they must be motivated and take action to get their home sold!