Selling In a Buyers' Market
Most reliable reports across the U.S. suggest that in most areas of the country real estate is no longer appreciating at the rates seen in the past few years. But, admittedly, the past few years were unusual, and the real estate market is correcting. The National Association of Realtors reports that nationwide August 2006 existing home prices were actually down 1.7 percent from a year earlier. The beginning of the correction, it would seem.
None of this news is dreadful or exceptionally bad unless you bought last year and you now need to sell. For those who have owned for several years and are considering selling now, the current market puts you well ahead of the curve in most communities.
Consider that in the year 2000, according to the National Association of Realtors, the typical existing home sold for $111,800 versus $225,000 in August of 2006. About double. Not surprising.
So, what constitutes the most likely successful scenario to insure a sale in today’s market? Consider these high-notes:
1. Buyer scarcity relative to home supply. (A buyers’ market).
Sellers have been in the driver’s seat for the past few years; but that’s no longer the case in most markets, let’s just face it. And so, sellers need to adjust, it’s that simple. But make a positive adjustment by making your home the most attractive, best-priced home in the neighborhood.
In the recent past, we noted that pre-market “prep” of homes was pretty much just a lick and a promise, if not totally ignored. In today’s market, painting, clean-up and repairs, large and small, all must be made prior to listing. Your home must stand out from all the competition like a buyer beacon. We have many valuable tips for just that purpose here in our Insight Blog. Check them out and employ them.
MLS pictures must be selected with care. Now more than ever, real estate is a visual medium first, via pictures that prospective buyers can and do view and scrutinize via the Internet. We cannot emphasize this one successful sales ingredient enough. If your Realtor or real estate agent takes lousy pictures OR no pictures at all (read this important post on the “no pictures” agent gambit), you’re dead right out of the gate, period. We cannot tell you how many worthy homes have been discarded from the mix of buyer choices because they don’t care for the pictures of the home. Nothing we can say or do can overcome this initial objection to a showing. And the more good pictures, the better. Buyers want to see as many pictures as possible. Make sure that your Realtor or real estate agent has a portfolio of pictures to send prospective buyers in addition to those permitted on the MLS.
2. Remember cash is always an issue. Use this to your advantage.
While home prices may have become only slightly more reasonable, real estate purchases will always be an extremely expensive proposition for most buyers—especially first-time buyers who lack much equity from prior sale. Answer that need in your offer. You can counter a reduced sales price by offering to pay buyer closing costs and lessening the dreaded out-of-pocket buyer cash requirements. Look like an angel to buyers. And, put this offer in your public offer. State an amount that you will pay towards closing costs.
3. Choose the right Realtor.
Choose a Realtor who demonstrates market savvy in attracting buyers. A Realtor or a broker who simply has lots and lots of listings may not actively market to buyers. It’s one thing to put a lot of inventory in your front window and just sit back waiting for buyers. It’s another thing entirely to be able to attract buyers. The only thing you need for selling your home are buyers, and lots of them.
In a slow market picking the right listing agent becomes especially important. Not only does the listing agent have to possess a keen knowledge of the area market in general, he must know what buyers are looking for and why. He must have active buyers feeding him information about price ranges, amenities desired in price ranges, buyer turn-ons, turn-offs. He must have lots of buyers who would consider YOUR home.
4. The numbers game.
Real estate sales are directly related to exposure. If the odds of selling a home are 100 to one, and it takes 100 inquiries and visits to get that one buyer, then the quicker you get those inquires the better. If you can get more than the 100 inquiries the odds of getting a top price and terms ratchets up.
That means that when you consider a listing agent, you need to review the proposed marketing methods with care. What is the listing agent going to do in terms of advertising, open houses, MLS placements, online marketing, broker relations, etc.?
Marketing plans that work for one property may not work for another. Your listing agent needs to be a skilled marketer. He needs to be able to pinpoint what makes your property unique and attractive, and he needs to market heavily. He needs to be thoughtful and energetic in his marketing plans. He cannot rest on recent past selling models. He must be imaginative.
5. It's a business deal. Unemotional and practical.
Things that don’t work:
• "I have to get this amount out of this sale because I need it to purchase the new property." The truth: Prices are established by the marketplace, not seller needs.
• "Similar homes across the way (in that subdivision or area) command this particular price; my house should sell for the same price, too." The truth: What is happening elsewhere is irrelevant. What is happening in the immediate neighborhood/area is what is really happening.
• "The people down the street got $750,00 for their home so I should be getting at least that much." The truth: This is not about the people down the street and your ego. It’s about bricks and mortar. The people down the street may have had an objectively better house. Face it.
• "The buyers’ offer asks that we leave the pool table – Who do they think they are asking for our “stuff”." The truth: Homes are all tied up with our psychological identity, who we are, our social status, etc. The market simply reflects supply and demand. It’s a market with a lot of inventory and lots of lookers, few takers. Leaving the pool table may be a lot cheaper than not getting a sale for months and months and months.
• "Last year this house would have sold for $750,000 and we will not accept a lower price!." The truth: It's not last year. It's now and the marketplace reflects current supply and demand.
Sellers can be successful in any market so long as they clearly understand the conditions and dynamics of the marketplace.
None of this news is dreadful or exceptionally bad unless you bought last year and you now need to sell. For those who have owned for several years and are considering selling now, the current market puts you well ahead of the curve in most communities.
Consider that in the year 2000, according to the National Association of Realtors, the typical existing home sold for $111,800 versus $225,000 in August of 2006. About double. Not surprising.
So, what constitutes the most likely successful scenario to insure a sale in today’s market? Consider these high-notes:
1. Buyer scarcity relative to home supply. (A buyers’ market).
Sellers have been in the driver’s seat for the past few years; but that’s no longer the case in most markets, let’s just face it. And so, sellers need to adjust, it’s that simple. But make a positive adjustment by making your home the most attractive, best-priced home in the neighborhood.
In the recent past, we noted that pre-market “prep” of homes was pretty much just a lick and a promise, if not totally ignored. In today’s market, painting, clean-up and repairs, large and small, all must be made prior to listing. Your home must stand out from all the competition like a buyer beacon. We have many valuable tips for just that purpose here in our Insight Blog. Check them out and employ them.
MLS pictures must be selected with care. Now more than ever, real estate is a visual medium first, via pictures that prospective buyers can and do view and scrutinize via the Internet. We cannot emphasize this one successful sales ingredient enough. If your Realtor or real estate agent takes lousy pictures OR no pictures at all (read this important post on the “no pictures” agent gambit), you’re dead right out of the gate, period. We cannot tell you how many worthy homes have been discarded from the mix of buyer choices because they don’t care for the pictures of the home. Nothing we can say or do can overcome this initial objection to a showing. And the more good pictures, the better. Buyers want to see as many pictures as possible. Make sure that your Realtor or real estate agent has a portfolio of pictures to send prospective buyers in addition to those permitted on the MLS.
2. Remember cash is always an issue. Use this to your advantage.
While home prices may have become only slightly more reasonable, real estate purchases will always be an extremely expensive proposition for most buyers—especially first-time buyers who lack much equity from prior sale. Answer that need in your offer. You can counter a reduced sales price by offering to pay buyer closing costs and lessening the dreaded out-of-pocket buyer cash requirements. Look like an angel to buyers. And, put this offer in your public offer. State an amount that you will pay towards closing costs.
3. Choose the right Realtor.
Choose a Realtor who demonstrates market savvy in attracting buyers. A Realtor or a broker who simply has lots and lots of listings may not actively market to buyers. It’s one thing to put a lot of inventory in your front window and just sit back waiting for buyers. It’s another thing entirely to be able to attract buyers. The only thing you need for selling your home are buyers, and lots of them.
In a slow market picking the right listing agent becomes especially important. Not only does the listing agent have to possess a keen knowledge of the area market in general, he must know what buyers are looking for and why. He must have active buyers feeding him information about price ranges, amenities desired in price ranges, buyer turn-ons, turn-offs. He must have lots of buyers who would consider YOUR home.
4. The numbers game.
Real estate sales are directly related to exposure. If the odds of selling a home are 100 to one, and it takes 100 inquiries and visits to get that one buyer, then the quicker you get those inquires the better. If you can get more than the 100 inquiries the odds of getting a top price and terms ratchets up.
That means that when you consider a listing agent, you need to review the proposed marketing methods with care. What is the listing agent going to do in terms of advertising, open houses, MLS placements, online marketing, broker relations, etc.?
Marketing plans that work for one property may not work for another. Your listing agent needs to be a skilled marketer. He needs to be able to pinpoint what makes your property unique and attractive, and he needs to market heavily. He needs to be thoughtful and energetic in his marketing plans. He cannot rest on recent past selling models. He must be imaginative.
5. It's a business deal. Unemotional and practical.
Things that don’t work:
• "I have to get this amount out of this sale because I need it to purchase the new property." The truth: Prices are established by the marketplace, not seller needs.
• "Similar homes across the way (in that subdivision or area) command this particular price; my house should sell for the same price, too." The truth: What is happening elsewhere is irrelevant. What is happening in the immediate neighborhood/area is what is really happening.
• "The people down the street got $750,00 for their home so I should be getting at least that much." The truth: This is not about the people down the street and your ego. It’s about bricks and mortar. The people down the street may have had an objectively better house. Face it.
• "The buyers’ offer asks that we leave the pool table – Who do they think they are asking for our “stuff”." The truth: Homes are all tied up with our psychological identity, who we are, our social status, etc. The market simply reflects supply and demand. It’s a market with a lot of inventory and lots of lookers, few takers. Leaving the pool table may be a lot cheaper than not getting a sale for months and months and months.
• "Last year this house would have sold for $750,000 and we will not accept a lower price!." The truth: It's not last year. It's now and the marketplace reflects current supply and demand.
Sellers can be successful in any market so long as they clearly understand the conditions and dynamics of the marketplace.
Labels: buyers' market, real estate, selling
0 Comments:
Post a Comment
<< Home