Well, it is the fall of 2013, and I find it quite interesting how much a market can change in less than a year. It almost seemed at the stroke of midnight this past New Year’s, buyers collectively decided to get off the proverbial bench and get into the real estate game.
At break neck speed, we went from not being able to give away listings to not being able to find listings for ready, willing and able buyers. That is why I think it is more critical than ever for sellers to properly price their homes for sale. I will always stand by the saying “pigs get fed, hogs get slaughtered.”
I’m seeing two things happen that concern me:
1. Buyers are so desperate to get into a property they are willing to over-pay. Multiple offers are abound and prices are being considerably driven up past recent sales. Yes, the market has bottomed out. Yes, home prices are up. However, the comps need to be there in order for the buyer to obtain their mortgage.
If the home doesn’t appraise, either the seller comes down on price or the buyer comes to the closing table with more money. In reality, who is really winning in that situation? No one. Everyone comes away from the deal with a bad taste in their mouth.
2. Sellers are grossly over-pricing their homes because of the lack of inventory. They are trying to take advantage of the market conditions, but this tactic will come back to haunt them in the end. The market is moving so swiftly that buyers know what things are selling for and what makes sense. If you significantly over-price your home, you are only helping your neighbor sell their home; plus, you are just ratcheting up the market time, and things are selling so fast that if you have a market time higher than a few weeks, buyers are suspect.
Make sure your clients see the black and white comparables from the last 90 days, and have them truly focus on the last 30. The market is ever changing, and you only get one chance to make a first impression. Make sure your pricing doesn’t get you put on the “pay no mind list.”
The last thing we need is to go back to how things were – a bunch of over-priced listings on the market and spooked buyers worrying about overpaying. Unfortunately, there are plenty of agents out there who are willing to “buy listings.” Lets keep sellers educated by telling them what they need to hear, not what they want to hear. If we collectively do that, we can help stabilize the market, and when that happens, everybody wins.
She currently has a show, “Property Envy,” on Bravo. Her past shows include “Designed to Sell” and “Hidden Potential” on HGTV.