Why people don’t buy. That may not sound like the most optimistic title, however unless you understand the mindset of today’s buyer, as a seller you will just keep chasing the market.
There is an old saying that real estate agents adhere to. “ If, other agents are not showing your listings, they consider them overpriced. If they are showing them and no offers are forthcoming, the buying market thinks they are overpriced.”
Just went through my morning email and there they were again, price reductions. At least fifteen sellers who have lowered the price of their property because it has not sold, and there will be more tomorrow. Price reductions are fine, if done properly. If price reductions are doe on a knee jerk basis they accomplish very little. Almost every property has a buyer if it is priced low enough, that concept is fairly easy to wrap your head around. The trick for any selling agent is to find the right listing price, which will serve the seller’s needs. Rarely does the cheapest price serve the seller’s needs, those typically fall into the category of “short sales” and in most cases benefit the buyer. So as a seller’s agent we must determine an asking price that will garner the most interest and result in a sale in the shortest time possible. How do we do that? Most start by looking at the market, performing a Comparative Market Analysis (CMA) and finding like properties on the market. Pretty simple, if I’m priced like all the rest then I’m competitive, Right? Not necessarily. If those properties have been on the market for long periods of time then all you are doing is putting another over priced home on the market. And if you look at what sold and don’t take into account Days On Market you are committing the same error. In today’s competitive market there are deficiencies in homes now that were overlooked when buying during the boom simply because the of the frenetic buyers-market that took place 10 years ago. And these must now be taken into consideration. What was once thought of as a minor inconvenience has turned into a major sales objection. Too many steps, road noise, too far out, no view, no granite counter-tops; these are just a few of what people bring to the table as objections when viewing homes, and all the explanations in the world will not change the mind of that buyer. And time drags on. And with no offers forthcoming the seller drops his price and begins to chase the market down; lowering his price, butt never enough to make a difference. A perfect example of this is a home that was appraised at 1.7 million in 2008. As the market began to turn the owner decided it was time to take his profits and he put it on the market at 1.4 million. No offers. The price was lowered to1.3 million dollars and he received one verbal offer of $950,000.00. He countered at 1.2 million dollars. The buyer walked. To make a long story short, the home was finally pulled off the market at $750,000.00 with no offers. The single biggest objection that buyers brought up was road noise heard from the back deck. Road noise was something that never entered his mind when he bought the land and built his house. At the time he considered himself fortunate to have purchased the land and procured a contractor. Not anymore. At this point the only thing that will sell the house in today’s market is a discounted price that is steep enough to make a buyer overlook the one major flaw. And that is not good for the seller. There are many reasons people buy a house, I believe, in today’s market, there are more reasons they don’t buy a house. And in a buyer’s market those reasons come to the forefront and to the negotiating table.
The job of a Realtor is to look at what might be preventing a sale and correct that situation. If, those deficiencies are hard wire, then in most cases lowering the price is the only option for getting your home sold in today’s market. Keep in mind, as the market changes and becomes more competitive, current sales objections become less relevant. It’s been a long seven and a half years for those trying to sell. The good news is, we are seeing improvement on an incremental level. And with luck we will see the value return to a promising level in High Country real estate.
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