I wonder how hard some folks are having coming to terms that they're not going to get what their neighbor got a year ago. That they're not going to strike it rich by selling their house. That they're not going to be able to fund their retirement with their housing ATM. And that they don't deserve a price - the market sets the price.
I think most people are struggling with the above. And mad at the world.
Here's an article from From ABC News Online. My biggest problem is it is telling people to go to realtors for financial advice. Zillow will do, or hire your own appraiser. A realtor, remember, gets paid to sell your house, not get you the correct price.
June 9, 2006 — Question: How do I determine the appropriate sale price for my home?
Answer: Over recent months, rising interest rates and increasing inventory have turned the real estate market into one favoring buyers instead of sellers, making it more imperative than ever to price your home correctly, experts said.
For starters, realize that the market has changed and that your home many not fetch as much as it would have six months or one year ago. The house may also take longer to sell in this environment.
"People won't overpay for houses in this market," said Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate Corp., which has more then 3,300 offices and operates in all 50 states.
Determining how low to go isn't easy, however.
"A house isn't a commodity," said Harley E. Rouda Jr., CEO and managing partner of Real Living Inc., a brokerage with offices in 11 states.
Rouda said one way to establish a reasonable price is to look at homes up for sale that are similar to your own and see what owners are asking.
"You have to know your competition," Rouda stated.
Keep your emotions in check when determining a price, experts advised. "Most people aren't realistic (when it comes to pricing their home). It is human nature to think your home is worth more than it probably is," Gillespie said.
June 10, 2006
Reality 101: Realize that the market has changed and that your home many not fetch as much as it would have six months or one year ago
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7 comments:
Keith,
First this person says to price your home according to what the "ASKING PRICES" are in your area, then in the same breath says that
MOST PEOPLE ARE NOT REALISTIC when pricing their home. On your blog over and over again I have read that the price is what the home will sell for, not what people are asking.
Around and around the spin docs go.
shows what bad advice you can get from the msm
everyone knows you start with the comps (the prices houses SOLD for in the 'hood)
geesh
The article mentions that you should get comps when you go to the link. The key is when the comps were priced. 6 months ago doesn't cut it anymore.
I have to say that yes, you do need to contact a Realtor. When you have a changing market like we do, the Realtors are the ones who know what to do to get houses sold.
Whatever you do, DON'T go to Zillow! Zillow only has old information and compares your house to others that sold in your area. However, due to the fact that Zillow receives their information from the County, there is a rather large delay between the time the close of a property actually happens and the time that Zillow can actually use it as a comp. For example, I used Zillow to comp my house recently. They told me it was worth $250K, when in fact, two houses that are down the street from mine just sold for $370K and they haven't been updated. Additionally, should my home be worth more if my house has a new kitchen, baths and is completely updated? Can Zillow tell? Nope. Oddly enough I just sold my home for over $400K. Should I have sold it for the Zillow price? I don't think so. I think my Realtor did a pretty darn good job of getting me the REAL value for my home. Can you imagine if I sold it For Sale By Owner using the Zillow price? YIKES!
I think that checking with several realtors to get the most recent comps in your neighborhood is actually a good idea. The realtors want your house to sell, because that is how they make their money. Therefore they are going to tell you what the most realistic asking price is, the price they think buyers will be willing to pay - UNLESS the seller is so stubborn and emotionally invested in the sale that they insist their house should sell for way more than other similar houses are selling for. Then sometimes the realtor will let the person insist on listing it for way too much money. That must be what's happening with the dozens of homes I see all over town with "For sale" signs - for the last six or seven months. Not mvoing. How many articles have we all seen recently with indignant sellers who asked hundreds of thousands more than they're currently worth - and then sellers are complaining about the buyers? Someone in a recent article actually whined "The buyers all have money - they're just refusing to spend it." No duh! I feel very badly for everyone who is going to be hurt as the market continues crashing, but I'm also not going to go give someone $100,000 more than their house is worth, just because they think I should.
Oh, and Zillow? I sold my house recently for $35,000 more than they said it was worth. So I would take them with a grain of salt.
-Florida Girl
When you do check with a realtor, ask him/her for the sale comps from 6 months to a year ago. Consider those comps closely. Do up a net sheet to see if you can afford to sell the home for around those prices. (hopefully you didn't re-fi, in which case will have plenty of equity).
Last years prices are a good starting point. Of course you can probably get more than that today, but the higher you ask the longer the home will sit on the market.
I'm offering discounted fees to sellers who are willing to set their offering price at below market value. I'm flat out walking out on sellers who want a price at today's comp rates.
I'm telling potential buyers that I'm willing to write offers for considerably less that offering price and don't care if it ends up taking an extra few months to find the right seller that will take my buyers offer.
Someone in my business has to start the trend. I'm still making a good living marketing in this fashion. And I am cautioning buyers that the market could very well be taking a dump and that they should take that into consideration and even their aggressive lower offer could be more than the value of the home might be in the future and that there is nothing wrong with waiting it out a little longer.
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