Again, another client suffers from denial and the result is an extra $50,000 out of their pocket. I can’t tell you how many times this happens. Our largest challenge today seems to be educating sellers where the current market value of their home is. A typical listing appointment for us goes like this: We visit the seller’s home to review the location, condition and functionality, and amenities of their home. We spend time analyzing the market to find the REAL MARKET VALUE of their home. After presenting the facts to them, you see a shade of pale come over their face. “No way their home could only be worth that much”, they say. “We want to price it a little high to see if we get any bites. Don’t you want us to get the most out of our house?”
Of course we want our clients to get the most out of their house! That is why we give them the right information at the beginning so they can make an informed decision. Unfortunately often times, they don’t take our advice.
After months and months on the market the sellers usually end up chasing the market as it continues to decline. The most recent experience we had just closed at $50,000 under what they could have sold it for over a year and a half ago when they started the sale process. That denial got the best of them when they decided to price their home at $360,000 instead of the $310,000 that we suggested. They couldn’t stop thinking that their home was much better than the comparable comps around their Creekside neighborhood on Poppy Hills. After 19 months of frustration, they finally cut their losses at $260,000. That is a hard pill to swallow; losing over $50,000! However, that is what commonly happens to sellers who do not price their homes effectively.
Zillow had just released some studies that showed that homeowners who bought their home after 2007 are overpricing their homes 14.1% on average. Homeowners who bought prior to 2007 are overpricing their homes by 10.5% on average. Depending on the price point of the home itself; that can significantly price a seller out of the market! Buyers are finding great deals and those great deals are here to stay. The idea of us bouncing back to healthy appreciation anytime soon is a fallacy. This market is here to stay for quite a while; and by that, I mean quite a few years.
If you are planning on selling, don’t price your home too high! It will cost you!
For a Free Professional Market Analaysis call 503-385-1518 or visit http://www.old.paramountoregon.com
Many sellers get frustrated because their homes are not selling in this market. It is completely understandable when they get showing after showing; people that they don’t even know trampling through their home compromising the security of their belongings, and quite honestly the security of their family.
When we advise sellers in pricing their home, we make sure to help them understand that this is the best buyers market that we have seen; possibly in history! There is a ton of competition and the buyers are few.
EVERY buyer is looking for a deal in today’s market. They are concerned with overpaying for a house in a market that continues to decline. Most of our decline has already happened, but we will continue to slide this year. It is important for a seller to consult their Real Estate professional and determine where their market is heading.
Sellers are not dealing with a market problem; they are dealing with a pricing problem. Homes are still selling. It is not like the 1930s or 1980s when hardly anything was selling unless it was on a seller contract. In a declining market it is imperative to price your home better than the competition. In addition to that, you must do everything to make your home physically set apart from the competition.
The first 6 weeks of a listing is the sweet spot where most buyers are going to see your home. Anything after 6 weeks results in a stale listing and buyers start to discount the desirability of that listing.
If a seller wants to have any chance of selling in this market, they must price their home correctly. Pricing a little high will only result in the home not selling, or if the seller is lucky enough to sell it, they will sell it for less than they could have, and much later than they could have if they only priced it right from the start. No one likes to lose money, but that is exactly what sellers are doing by pricing their home above the competition in a declining market.