Top 5 Reasons Why Home Sellers Need to Position Themselves for 1st Place
January 30th, 2011 categories: Selling Strategies
There are many reasons to position your home to be the next in line to sell. Here are the top 5:
1. You’ve put your house on the market. That means it’s time to sell! You’ve decided to move for a variety of reasons. Maybe a job transfer, maybe a move up or down, maybe a tightening mortgage payment. Regardless, Sellers can’t rely on the old theory, “I’ll just put it on the market and see what I get.” That’s so yesterday. Don’t waste your time or your Broker’s time. The Buyers out there are too savvy. They won’t “just make an offer.” Too many Sellers still haven’t realized how important positioning is, and how competitive the market is right now. Regardless of a renewed sense of consumer confidence, there will not be a marked appreciation on your house for quite awhile.
2. When rates do begin to rise, and they have been over the past two weeks, Buyers’ purchase power will begin to erode. That means the pool of potential customers for the product you’re selling will get smaller. Your house is on the market – it’s a product. It should appeal to the largest number of potential purchasers as possible. And it should either be a phenomenal deal, or be updated to current taste and style. Don’t underestimate the feedback if you hear the price is too high. That might be a reflection that rates are impacting Buyers and their willingness to make an offer on a property they view as average – either for reasons of pricing or condition, or both.
3. There is an unseen pent-up inventory of homes waiting to hit the market. More inventory will translate into more competition and eroding or flat prices. Sell now, before you’re competing against the Seriously Delinquent, Pre-Foreclosures and Bank-Owned Properties (REO Inventory.) A recent Core Logic study shows how much inventory threatens to come on the market throughout the U.S. in coming months.
4. Don’t think distressed sales won’t affect your price. Should appraisers attempt to use like-kind sales? Yes, they should. But when short sales and foreclosures begin to dominate they will affect pricing throughout the market. In the high-end, we’re seeing more and more short sales, more and more bank-owned properties. Everyone has been affected by the Great Recession – get your home sold if that’s your goal. Listen to what your Broker tells you about price and condition. Your Broker is your consultant. She (or he) is there to help you.
5. It’s time to keep emotion out of it. That’s hard, I know. If I were selling my home today, I would want the highest price possible. But the price in your mind is not usually the price a house sells for. Do you truly want to sell your house now? Isn’t that why you’ve gone to the effort of readying it for the market, making it available to Buyers, and hiring a Broker? Be a savvy Seller, one who can brag to your friends that you sold quickly in a really tough market. Don’t be the Seller with multiple price reductions and months and months on the market. You will lose in the end. Be the Seller who sells – the entire reason you’ve placed your home for SALE!
Visit www.GretchensDenver.com. Gretchen Faber’s Denver Real Estate web site with local resources, homes for sale, and terrific presentations of the top properties in Denver.
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How Long Does it Take to Sell a House in Today’s Market?
August 6th, 2010 categories: Selling Strategies
Real estate brokers are often asked, “How long will my house be on the market?”
We can only speak in averages, utilizing some of our experience to weigh and balance your home’s appeal, decor, location and other salient factors. One key factor is assessing how much inventory we have on the market. And where the new listing falls among the competition for price and condition.
Sellers should pay attention to the length of time their house will take to sell for a few reasons:
- One is to brace yourself for the daily grind of preparing a house to show at any moment.
- Another is to reflect on timing issues. Do you need to be moved by the start of school? Do you want to take advantage of the prime selling season? Are you being relocated in three weeks?
- The most important reason to pay attention to average selling time? Pricing!
In Denver, the MLS posts average Days on Market. Higher inventory generally means longer DoM. When inventory is lower, DoM shrinks too. In May 2010, we had 21,433 homes/condos on the market. Average DoM was 76. In June 2010, we had 22,689 homes/condos on the market and the average DoM went up to 82.
Average DoM is looking back. Looking forward, how long could it take to sell? Take existing inventory and divide by sales that month. In June, Denver had 5.4 months supply of single family homes on the market.
Here’s a simple chart to explain the conventional real estate wisdom around inventory and time on market. When houses take 7 months or more to sell, it’s a depreciating market. When it takes less than 4 months, prices will be appreciating. This is basic real estate supply and demand.
Denver’s available single family as compared with closed is pushing us above 5 months of inventory. DoM will likely continue to lengthen in coming months. More homes coming on, fewer selling. Eventually, this could erode the price stabilization we’ve had.
However! Buyers could react to low rates and low prices, realizing that their dream of a new home has more to do with lifestyle than with timing the markets. If banks don’t push out too much new inventory, prices will keep stabilizing.
It’s the shadow inventory that threatens us. Without that, Denver is poised to bump along for awhile and then turn the corner. There are buyers who recognize this is a great time to buy. They will get the good deals at great rates. Sellers must be keenly aware of the fine balance we’re facing – balancing how new inventory could affect their saleability.
Watch the monthly market statistics here. Do the math and calculate how many months inventory we have and determine the best way to move your home to the front of the line – the home that buyers will pick next.
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Top 5 Things You Must Know to Get Your House Sold Now
August 5th, 2010 categories: Selling Strategies
A friend of mine is a lender in a mountain town in Colorado. We’ve been talking about home sales and where the market might be headed. Here is an excerpt of an email he sent me yesterday:
“From what I’m hearing around the country (from lenders,) everyone has seen the buyer market completely dry up. Like off a cliff. Wonderful. At least I’m busy with refinances.”
Why is the buyer market drying up? Rates are at unbelievable lows. Like nothing any of us has seen in our lifetime. Prices are as low as they’ve been since 2004. With low rates and low prices, buyers can now purchase a home they could only dream about 5 or 6 years ago.
But here’s the rub – some buyers are struggling with unemployment, some are pulling back on spending and paying off debt or refinancing, and some have changed their mindset from a house being a home to a house being an investment. Those in the last category seem compelled to wait until the market “bottoms out.”
They may be able to time the bottom, but they’ll likely as not miss it. The buyers who are buying now are the ones who realize that this current combination of low rates and low prices affords them the opportunity to focus on home as a lifestyle. To find the home they want to live in and raise their families in, to retire in, to relax and shut out the craziness of the world in.
How do you get those buyers to make an offer on your house today? Here the top 5 things you must know to get your house sold:
1. Know your competition – There has been a lot of talk about “shadow inventory” the past few months. What does that mean and how does is affect you? Homes that are in the pipeline to come on the market, but aren’t on the market yet are in the shadow inventory. Homeowners who are delinquent, but not yet in foreclosure are highly likely to have their homes added to this inventory. Bank owned properties tend to reduce the value of all homes for sale, so this potential inventory poses some risk that we’ll have flat or reducing prices until we work this pig through the snake. The experts suggest that we have between 4 and 8 million distressed properties not yet on the market.
2. Know where you stand - You MUST pay attention to the feedback. Some sellers say, “no one has said anything about price!” They counter that the feedback has been about the size of the basement, the size of the back yard or the master bedroom closets. I’m here to tell you now – this is disguised price feedback! Sellers, know this – There’s an ass for every saddle. If you are getting feedback like the above the only way to address it is through price. The buyers aren’t finding the value in your house yet, so they’re looking for another saddle. If the feedback says your house is dirty or the paint is chipping, then you can clean and paint.
3. No showings means wrong price – Are you getting no showings? You rightfully feel that you can’t react to the feedback because you aren’t hearing any. First, have your broker review the listing as it’s entered into the MLS. Make sure that there isn’t a mistake like the wrong sub area or incorrect directional information. Check that the house is showing up on the typical internet sites. Then consider whether you are ready to plunge into potentially severe price reductions. With no showings at all, you could we way off target. You’ll need to step down your price until you begin to get showings. You can now react to the feedback and see if you hit it, or if you need to reduce further.
4. Keep abreast of new competitors – Shadow inventory doesn’t only include bank owned properties. It’s also comprised of the homes that sellers will be putting on the market while you’re still trying to sell. Studies suggest that a tremendous number of sellers have been waiting until they perceive the market is turning around. In Denver, this shadow inventory has been hitting the market since our news got better. Available properties are increasing as the news about homes sales improves. The good news has been fabulous, but the added inventory will lengthen the time it takes to sell a home, which could result in further price depreciation. 22 million people in the U.S. are at least somewhat likely to put their home on the market at signs of a turnaround.
5. Don’t get behind the rock – No, not Dwayne Johnson. I wouldn’t mind being behind Dwayne. I mean the rock that’s rolling downhill. If your house has been on the market for more than 30 days and/or 25 showings without an offer, you’re behind the rock. Once you’re behind a rock that’s rolling downhill, it’s very hard to get back out in front of it. Get in front of it now. Look at the last chart carefully. This is Case Shiller’s projected increase in inventory for the Denver area. We’re facing an 89% increase in inventory in the next year. Of course, that won’t be released all on the same day or week, but it’s a number to pay attention to. If they’re even half right, we’ll have a lot of homes to sell in coming months.
Your broker’s job is to expose the house to the larger market – via MLS, internet marketing, personal networking, open houses, blogging, mailings, etc. Your job is to react to the feedback. Don’t take it personally. It’s not a reflection on your choice to buy the house (it may be if you live on a freeway.) It’s a reflection on the market and what buyers – the only ones who count – think the house is worth.
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Is Your House For Sale? Why Isn’t it Sold!?
August 4th, 2010 categories: Selling Strategies
You’ve been on the market a few weeks, or a few months. You’ve cleaned, you vacuum and turn on the lights before every showing.
Your broker carefully analyzed the recent sales and the current competition – the price seemed ok. Not too high, but not leaving money on the table either. You can always come down, you reasoned.
You eagerly await the feedback from every showing. Is this the one?
Now is the time to seriously reflect on why you are selling your house and what you’re going to do about it.
This market is kicking the pants off of experienced brokers and willing sellers. Now is the time to take the emotion out of it and analyze.
Denver has been riding a high. We’re in the news about our recovery. Our Days on Market are down from last year, meaning less time to sell a house. But wait! Days on Market are up since May. Inventory is up since last year and since May. What’s going on?
A Survey of 109 experts, economists and analysts by Macro Markets in the slide above shows that their expectation is that prices will not begin a serious rebound from today’s prices until 2012. And we’re likely to see a decrease in prices between now and then.
Why? The dreaded “shadow inventory” still lurks. Denver real estate has benefited from banks holding back their REO properties. Partly because they’re taking longer to foreclose and partly because they’re waiting for the market to turn. These homes will be on the market in increasing numbers in the months to come. Combine that shadow inventory with pent-up seller desire to sell, and you have a recipe for a huge influx of inventory.
More on this tomorrow. Consider this – you have your house on the market today. Do you want to compete with REO properties that will surely drive prices down? Do you want to compete with new listings when yours may be viewed as stale? Price to sell today. You can move on – for all of the reasons you decided to sell in the first place. I’ll bet that divesting of an “investment” wasn’t your main reason to move. So focus on the real reasons – to be closer to family, to move to new schools, to follow a job. Forget about the idea of waiting it out and getting a few more dollars. My crystal ball tells me that’s gonna take awhile.
Search for your next home at Denver Real Estate.
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