We’re in the midst of a challenging home-sale market in many areas. However, soft markets can provide opportunities for some home sellers. The trick is to price your home right for today’s market.
The most difficult reality for most sellers to face is that prices in their neighborhood may have dropped during the last year or two. Some sellers will find that it may not make sense to sell if the probable sale price is too low.
If you have the luxury of waiting for a better market, stay put for now. Be sure to check with a knowledgeable real estate agent before you make a decision to move forward — one who knows the local market well.
HOUSE HUNTING TIP: It is an advantageous time for move-up buyers, who may have to sell for less than they would have a few years ago. But, they may also pay a lot less for the home they buy.
A seller usually has an advantage selling when there isn’t much competition from other listings. Even though the listing inventory was low in some areas at the end of 2007 and the beginning of 2008, anticipate that there will be more listings coming on the market in April and May — the traditional home-selling season.
Today’s home buyers are extremely price-conscious. If there is a lot to choose from, price will certainly be a big factor. A price that’s too high for the market won’t bring the desired result.
Homes don’t necessarily lose value at the same rate in a soft market. In the current environment, buyers are more cautious about what they buy because they know that the property they buy might drop in value before it starts appreciating. They buy for the long term and are less prone to make compromises.
The homes that have what most buyers want tend to hold their value better in a down market than do homes that have an incurable defect. Here a few examples of defects that can’t be cured: an awkward floor plan that can’t be fixed, a location next to a noisy freeway or a house that is either up or down a lot of stairs.
Homes with defects that can’t be corrected are easier to sell if there’s low inventory, and it’s a seller’s market. We are now in a buyer’s market. This doesn’t mean you can’t sell your home if it has an incurable defect. However, you will need to account for the deficiency in the price. Keep this in mind when you compare your home with one that sold recently that had level-in access, a livable floor plan, and wasn’t on a busy street or next to a freeway.
The condition of your property will also be scrutinized more carefully in the current market than it would have been a few years ago. You can sell a property that has deferred maintenance. But, you will sell it more quickly and for a better price if you can repair defects and have the property looking great when it hits the market. If this is not possible, take this into consideration in your list price.
It’s difficult to hit the market price for a property if there haven’t been many recent sales in the neighborhood. If you miss the target and find that you’re home is priced too high, lower it as soon as possible. A price reduction is no longer a stigma in this market.
THE CLOSING: Letting a listing sit on the market too long at a high price sends the wrong message to buyers and could result in a lower sale price if market prices in your area continue to decline.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer’s Guide," Chronicle Books.
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