The news today is more of the same…Case-Shiller Index points toward double dip in housing. That might be so, I don’t know. Are prices soft. Yes. Is it difficult to sell a home today? It depends. Where is it located? What’s the price point? How updated is the home?
Here’s the challenge for the market concerning inventory particularly in some of the bigger, more populated western suburbs of Minneapolis:
- 5-10% are BANK OWNED and are THE HOTTEST properties on the market – BUYERS GO HERE FIRST
- 10-20% are SHORT SALES – generally these properties might be in some disrepair. There is lots of uncertainty as to what the bank might actually accept for the property. They stay on the market a long time and are a real drag on the overall market causing more pain for traditional sellers.
- 70-80% are TRADITIONAL SELLERS who can actually sell. The problem is at best one out of five are priced well and in excellent, updated condition. Buyers today aren’t looking for fixer uppers unless they are investors.
So, what happens when you’re out showing property? We look first at the BANK OWNED homes as they generally represent the best deals in the market. We then very selectively choose some of the TRADITIONAL SELLERS to go see IF the home is priced decently and IF it appears to be nicely updated. The others sit. SHORT SALES…for the right buyer with a certain pain threshold and tolerance, we’ll go take a look…if only to have some fun just to see what it looks like. We then have to factor in the difficulty and likelihood of getting a deal done.
So all of that is the precursor to the article I saw in The Wall Street Journal today entitled, “Buyer’s Market? Stressed Sellers Say Not So Fast?“ Everyone thinks it’s a buyers market until they try to put an offer in on a house. Often times those homes are ending up in multiple offer situations today.
Here’s a quote that readily articulates the biggest challenge in today’s market:
Many sellers may be unable or unwilling to lower their home prices – mostly because they may be underwater on their mortgage – so buyers are increasingly finding lower offers than list price denied. Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say.
If you are a TRADITIONAL SELLER and you do have the equity and financial wherewithall to sell, please don’t fool around with your asking price by pricing it over the market. You will hurt yourself in the end with a lower sales price. Price it right immediately. If you and your agent get it wrong (and you’ll know almost immediately with the exception of luxury properties), then adjust your price quickly. Your home is worth the most those first few days on the market. As days on market increase your value drops accordingly. Best to err on the side of being overly aggressive on your price – i.e. at or just below market.
For more on pricing your home properly, please see my video (albeit not high production quality) on pricing your home properly in today’s market. You’ll at least get the point I’m making.
- 5 Steps to Deciding How Much to Offer – or Ask – for Your Home (shortsalemagna.wordpress.com)
- It’s a Buyer’s Market: With home values generally declining and… (curbed.com)
- Spring Market Conditions Bode Well For Buyers (tammyprice.wordpress.com)