Sellers: Will You Be A Good Buy or a Good Bye?

Posted on | July 21, 2009 | Written by: Diane Donnelly

As you may or may not know, 95% of the success of the sale of your home depends on price. The old saying location, location, location is bunk. If your home is in an appealing area and is priced incorrectly, it won’t sell. If your home is in a less appealing area, but is priced well, it will sell. In fact, it will likely sell before the home in the appealing area!

We all agree we are in a buyer’s market. What makes a buyers market? When the inventory of homes available (actively on the market) exceeds 6 months, it is considered a buyer’s market.

What does a buyer’s market mean to a buyer? He/She can:

Generally be in a better position to negotiate price and terms with the seller
Enjoy having more homes to choose from
Make an educated buying decision as opposed to having to buy a house sight unseen due to the “seller’s market” pressures
Generally get away with asking for more contingencies ie. Structural and Mechanical, mold, radon, etc.
Put time limit conditions in the offer to purchase to put the pressure on the seller
Potentially buy a home under market conditions if the seller is motivated to sell and to sell quickly

The cards are stacked against the seller in the situation. How can the seller set himself apart from his competition? It’s really quite simple. Have your realtor present a Comparable Market Analysis (CMA) for you. This data will help you to gain a better understanding of your local real estate market. It will include homes that are currently available, homes that are sold, homes that are under contract and homes that were rejected by the market, that is - expired or withdrawn listings. Pay particular attention to the homes that have sold. Logically, these homes have gone to settlement because the market allowed for this sales price and this appraised value. Resist the temptation to list your home based on the active listings - they have not found a buyer to pay the price that is being asked. This is a dream list. The sold’s are a real list.

Seller’s - if you want to sell your home, you must be a good value. You must be priced well so a buyer is willing to pay the price to buy your home. Gone are the days that you can price your home with an inflated sales price to “allow for negotiating”. Understand that if you price your home to high, you will have eliminated or reduced your opportuntiy to see prospects. Without prospects, you will not get offers. Without offers, you do not get to meet your objective of selling your home.

In the most recent few weeks, I have received multiple offers on three of my houses. Some would argue the home was priced to low. Some would argue it was priced to sell. And some would fall in between. The rest of the story? In all three cases, the sales price came in higher than the asking price. Why? The buyer’s fear of loss. We created an atmosphere to create competition. We priced the home where it should have been priced to begin with. If an offer came in low, we could reject it or make a counter offer. But without an offer or prospects, we have absolutely nothing to work with.

Seller’s - put yourself in the shoes of the buyer. If you were looking for homes while in a buyer’s market, would you look at the highest priced home in the community when there are 5 others that are lower, in the same condition, in the same location, with the same number of bedrooms and baths, etc.? When the market shifts and it becomes a seller’s market again, this blog will reverse and the buyer’s are going to receive the message - put the offer in now or risk paying more tomorrow or worse - missing out on your 3rd home this week!

I am in no way suggesting to give your home away. I am suggesting to you that you use an agent with a proven track record to sell homes. I am suggesting you study the market data that was presented to you. I am suggesting that you keep an open mind to the information and you avoid trying to hear what you want to hear. (We all want the highest price for our home). And most importantly, I am suggesting that you begin to detach from your home emotionally and work hard to make choices of logic and reasoning vs. emotional ties to the home.

I want to share with you some local market statistics year over year for sales in Anne Arundel county, Maryland. According to MRIS, new listings are down 15.3%, closed sales are down 13.1%, Pending sales are up 4.4%, and Average days on the market are up 3%. Sellers must do something to set themselves apart. Create Value. Be competitive.

If you would like local real estate statistics in your area and are in the greater DC, Baltimore area, please feel free to contact me and I will provide you with the information necessary to get your home sold! Will your home be a Good Buy or a Good Bye?

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