What's It Gonna Take To Sell Your House?
On Friday, April 6, 2007, the St. Petersburg Times ran an article on the front page headlined "Even a Realtor will tell you: Glut is huge". The subheadline stated that "The 'staggering' home inventory erases hope of a recovery in 2007".
Well, if I was trying to sell a house or condo, I'd be pretty discouraged after reading that article in the paper. I'd probably shrug my shoulders and ask "what's the point".
What's sad is that the Times has prepared a story that is absolutely true. Some people will say their story stresses the negative side of the problem, but it is actually just stating the reality of the marketplace as it is today. It uses the same facts that I have been reporting on this blogsite for months and comes to the same conclusion: there is a glut of real estate on the market and the end is not yet in sight.
For the first time ever the St. Petersburg Times has looked at the Absorption Rates and made the correct conclusions -- the market is crummy, the worst in many years, and shows no sign of improving. And no, Virginia, the market has not bottomed out yet. Prices will continue to drop, because in a dynamic and free economy that's what happens when there is an oversupply. Remember, that's Econ 101.
What the Times is not telling readers is that even in this down market, some properties are being sold. Not many, but some.
So, you may ask, what does it take to get a house sold today. Well, here's what I think ...
1. Make Your Property The Best It Can Be. Economists will tell you that anytime there is an oversupply of any product, only the best gets sold. Right now, there are more cars in the United States than licensed drivers. It's been that way for years, did you know that? Yet new cars keep getting sold. Why? Because car manufacturers keep making new cars better every year. Call it planned obsolescence. Call it re-engineering. Call it anything you like, but every year a new crop of cars come out that are better (or different) in some way than the previously manufactured models. People will buy the new cars simply because they are believed to be better than the other ones.
I believe the same thing is true in selling real estate. You have to make your house better than other houses on the market. You have to use staging techniques so it is presented better than the cluttered house down the street. You have to re-landscape to give it more curb appeal. You have to update the kitchen and bathrooms to make it appealing to today's younger and more demanding buyers. You need to paint it, put on a new roof, update the electrical panel, and do all the things that make it shine like the chrome on a new car. If you don't, it's gonna sit for a long time and when a buyer comes along you're going to get below-average offers.
2. Make Your Property The Best Value. The St. Petersburg Times reports that buyers are currently content to sit on the sidelines waiting for prices to drop. They don't want to buy a property and watch it lose value while the market continues to "adjust". You can't blame a buyer for thinking that way, although it is kind of short-sighted.
Given that attitude among buyers, it behooves a motivated seller to make his property the best value he can. After you've taken the actions outlined in step one, price your property so it is the lowest priced house in the neighborhood among comparable properties. Find out the prices for every comparable home in the area and put a price on your property that is just under the next lowest price. If the lowest current price for a house similar to yours is, say, $335,000, put your house on the market at $330,000 for example. That's good pricing stratgey, and good marketing strategy.
I know of a condominium community on Tierra Verde that has a lot of units for sale right now -- most of them vacant. Every time somebody lowers their price, everybody lowers their price. They seem to be doing it in $5,000 bites. It's like an old-fashioned price war, execpt we're selling condos instead of gasoline.
3. Get Sophisticated With Your Marketing. When the market was hot a couple of years ago, you could plant a sign in the front yard, place an ad in the paper, put the property in the MLS system and watch offers come pouring in. Ah, those were the days. But they are gone, man, long gone.
Today, you need to recognize that without high-level marketing your property is not going to get enough exposure among the few remaining buyers and their real estate agents to attract any showings.
If you're a FSBO I'm going to point out something important to you. Most likely you don't have the marketing tools to call any real attention to your property, at least not enough attention to find a buyer in today's buyer-thin market. Buyers are coming here from foreign countries and already know about properties for sale. How? The internet. About 80% of today's buyers search the internet for real estate before they talk to a real estate agent. If you're a FSBO and you don't have a website or are not included on one of the top sites like Realtor.com, well, you're just not getting enough of the right kind of exposure. If you're selling high dollar real estate over $750,000 you need special marketing designed to be seen by the world's wealthy. Simple as that. Some real estate agents can give you that kind of marketing exposure, some can't. Find one who can and hire him (or her) to sell your property. Otherwise, you're just fooling yourself about your chances of ever selling in today's market because you're leaving it to luck.
4. Negotiate Every Offer. "That offer is so low I won't even counter it"! How many times have I heard a seller say that? Well, in this market you better forget about your pride and toughen your hide. Negotiate every offer that comes in. Frankly, the first offer may be the only offer you get for a long, long time and you better take maximum advantage of it. Never let an offer go by without some kind of counter. Never.
5. Make Concessions. Be ready to make concessions to buyers. Most likely, they are going to ask for them anyway, so you might as well be prepared to pay for things like closing costs, carpet allowances, seller financing, tax allowances, insurance payments, maintenance fees, assessments, moving expenses and the like. I've even heard of buyers demanding and getting boats, cars, club memberships and other things from sellers just to make the deal happen. So don't be surprised if these kind of things crop up in the offer.
In no particular order, here are some other things to keep in mind since they have a bearing on selling your house. First, it looks to me like the higher the price the softer the market. Keep that in mind when you are putting a price on your property.
Second, don't be fixated with making top dollar on the sale of your home. Property is depreciating now, so the market is not going to let you get absolutely the highest price. The market has not yet "bottomed out" in my opinion, and I look for prices to get lower.
Third, if you bought the property in 2004 or 2005 and want to sell it now, you're probably in trouble. You bought at the top of the market and now you have to sell when prices are declining. These short-term sales mean you are treating real estate like a commodity and sometimes commodity prices get drpressed quickly and remain depressed for a prolonged period. Eventually, however, they come back. So, show some patience. You may have to ride out the cycle.
Last year I sold two apartment buildings that I owned. I did it by doing all the things I've just outlined. I remodeled wear-worn apartments, painted inside and out, put on new roofs, re-did my landscaping, made concessions on insurance premiums and lowered my prices on both buildings several times. I advertised until I was blue in the face, made counter-offers, and made certain my buildings were the best in town at that price. After months of work I managed to sell both of them and made a tidy profit. I was fortunate. I'm sure that if sellers follow the advice I've just given, and be patient, they'll successfully sell their property.
For more information on real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
Well, if I was trying to sell a house or condo, I'd be pretty discouraged after reading that article in the paper. I'd probably shrug my shoulders and ask "what's the point".
What's sad is that the Times has prepared a story that is absolutely true. Some people will say their story stresses the negative side of the problem, but it is actually just stating the reality of the marketplace as it is today. It uses the same facts that I have been reporting on this blogsite for months and comes to the same conclusion: there is a glut of real estate on the market and the end is not yet in sight.
For the first time ever the St. Petersburg Times has looked at the Absorption Rates and made the correct conclusions -- the market is crummy, the worst in many years, and shows no sign of improving. And no, Virginia, the market has not bottomed out yet. Prices will continue to drop, because in a dynamic and free economy that's what happens when there is an oversupply. Remember, that's Econ 101.
What the Times is not telling readers is that even in this down market, some properties are being sold. Not many, but some.
So, you may ask, what does it take to get a house sold today. Well, here's what I think ...
1. Make Your Property The Best It Can Be. Economists will tell you that anytime there is an oversupply of any product, only the best gets sold. Right now, there are more cars in the United States than licensed drivers. It's been that way for years, did you know that? Yet new cars keep getting sold. Why? Because car manufacturers keep making new cars better every year. Call it planned obsolescence. Call it re-engineering. Call it anything you like, but every year a new crop of cars come out that are better (or different) in some way than the previously manufactured models. People will buy the new cars simply because they are believed to be better than the other ones.
I believe the same thing is true in selling real estate. You have to make your house better than other houses on the market. You have to use staging techniques so it is presented better than the cluttered house down the street. You have to re-landscape to give it more curb appeal. You have to update the kitchen and bathrooms to make it appealing to today's younger and more demanding buyers. You need to paint it, put on a new roof, update the electrical panel, and do all the things that make it shine like the chrome on a new car. If you don't, it's gonna sit for a long time and when a buyer comes along you're going to get below-average offers.
2. Make Your Property The Best Value. The St. Petersburg Times reports that buyers are currently content to sit on the sidelines waiting for prices to drop. They don't want to buy a property and watch it lose value while the market continues to "adjust". You can't blame a buyer for thinking that way, although it is kind of short-sighted.
Given that attitude among buyers, it behooves a motivated seller to make his property the best value he can. After you've taken the actions outlined in step one, price your property so it is the lowest priced house in the neighborhood among comparable properties. Find out the prices for every comparable home in the area and put a price on your property that is just under the next lowest price. If the lowest current price for a house similar to yours is, say, $335,000, put your house on the market at $330,000 for example. That's good pricing stratgey, and good marketing strategy.
I know of a condominium community on Tierra Verde that has a lot of units for sale right now -- most of them vacant. Every time somebody lowers their price, everybody lowers their price. They seem to be doing it in $5,000 bites. It's like an old-fashioned price war, execpt we're selling condos instead of gasoline.
3. Get Sophisticated With Your Marketing. When the market was hot a couple of years ago, you could plant a sign in the front yard, place an ad in the paper, put the property in the MLS system and watch offers come pouring in. Ah, those were the days. But they are gone, man, long gone.
Today, you need to recognize that without high-level marketing your property is not going to get enough exposure among the few remaining buyers and their real estate agents to attract any showings.
If you're a FSBO I'm going to point out something important to you. Most likely you don't have the marketing tools to call any real attention to your property, at least not enough attention to find a buyer in today's buyer-thin market. Buyers are coming here from foreign countries and already know about properties for sale. How? The internet. About 80% of today's buyers search the internet for real estate before they talk to a real estate agent. If you're a FSBO and you don't have a website or are not included on one of the top sites like Realtor.com, well, you're just not getting enough of the right kind of exposure. If you're selling high dollar real estate over $750,000 you need special marketing designed to be seen by the world's wealthy. Simple as that. Some real estate agents can give you that kind of marketing exposure, some can't. Find one who can and hire him (or her) to sell your property. Otherwise, you're just fooling yourself about your chances of ever selling in today's market because you're leaving it to luck.
4. Negotiate Every Offer. "That offer is so low I won't even counter it"! How many times have I heard a seller say that? Well, in this market you better forget about your pride and toughen your hide. Negotiate every offer that comes in. Frankly, the first offer may be the only offer you get for a long, long time and you better take maximum advantage of it. Never let an offer go by without some kind of counter. Never.
5. Make Concessions. Be ready to make concessions to buyers. Most likely, they are going to ask for them anyway, so you might as well be prepared to pay for things like closing costs, carpet allowances, seller financing, tax allowances, insurance payments, maintenance fees, assessments, moving expenses and the like. I've even heard of buyers demanding and getting boats, cars, club memberships and other things from sellers just to make the deal happen. So don't be surprised if these kind of things crop up in the offer.
In no particular order, here are some other things to keep in mind since they have a bearing on selling your house. First, it looks to me like the higher the price the softer the market. Keep that in mind when you are putting a price on your property.
Second, don't be fixated with making top dollar on the sale of your home. Property is depreciating now, so the market is not going to let you get absolutely the highest price. The market has not yet "bottomed out" in my opinion, and I look for prices to get lower.
Third, if you bought the property in 2004 or 2005 and want to sell it now, you're probably in trouble. You bought at the top of the market and now you have to sell when prices are declining. These short-term sales mean you are treating real estate like a commodity and sometimes commodity prices get drpressed quickly and remain depressed for a prolonged period. Eventually, however, they come back. So, show some patience. You may have to ride out the cycle.
Last year I sold two apartment buildings that I owned. I did it by doing all the things I've just outlined. I remodeled wear-worn apartments, painted inside and out, put on new roofs, re-did my landscaping, made concessions on insurance premiums and lowered my prices on both buildings several times. I advertised until I was blue in the face, made counter-offers, and made certain my buildings were the best in town at that price. After months of work I managed to sell both of them and made a tidy profit. I was fortunate. I'm sure that if sellers follow the advice I've just given, and be patient, they'll successfully sell their property.
For more information on real estate in Pinellas County, visit my website at www.TheStPeteRealEstateSite.com.
-30-
posted by Terry Ward at 4:22 AM
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