Sunday, February 13, 2011 -
By Suzanne Grace
Special to Relocation.com
Real estate agents today are constantly being put in a position of being the bearer of bad news and, as such, seem to be the "fall guy" for what is pure economics in the housing market.
I find it extremely difficult to convince my clients that although the market rose unreasonably from 2004 through 2007 in some parts of the country, it was never based on economics; it was based on the availability of cheap money.
The decrease in sales is largely due to the fact that the buyers who supported the inflated market were those who made a quick buck on "flipping" homes, and they have stopped investing. There were also loan programs that would sell to your pet as long as it had a social security number, and these programs are no longer available. Consumer confidence is also low because of the fear that's replayed day after day in the never-ending media blitz.
So selling in today's market doesn't mean – and isn't about – listing it for the highest possible price.
It truly doesn't matter what the neighbor's house sold for a year ago -- or even three weeks ago. Because of the large inventory of homes for sale, buyers today are overwhelmed with choices, all set against the media's relentlessly negative drumbeat of bad news. In fact, most buyers and sellers completely misunderstand the opportunities of buying in a changing market.
Selling a home really depends on two things: the motivation of the seller to sell, and more importantly, what the buyer is willing to pay for it -- PRICE is the factor. It doesn't matter what a seller may want or need from the sale; what matters is the market and what someone is willing to pay. In other words, a seller cannot make his financial issues a buyer's problem.
However, when a property is priced right, it will sell!
If you find yourself in a situation where you absolutely need to sell, ask yourself this question: If there are 10 houses for sale in your neighborhood and a comparable house down the street is selling for $30,000 less than what you are asking, which house would you buy?
Another factor to consider: The agents who are trying to sell that cheaper house down the street will show them your home first to make sure their clients see the value in the other property.
A simple calculation may help you think of this differently. Take the cost of your mortgage over the next six to 12 months and compare that number to the cost of a price reduction that you need to make in order to sell your home. You can have that money in your pocket each month or you can throw it away -- the choice is yours.
What is it worth to you to be able to make the move? You can hang on, chasing the market down, essentially losing more money each month -- or you can price it right, today, and sell your home.
If you are willing to put your life on hold until the market changes, hold tight to your price. Or you can reach for the opportunities that present themselves now, price it to sell and move on.
Keep in mind that whatever you have "lost" on your current home is "gained" on your new purchase, so you are effectively selling your home for what you need to. The opportunities are there; you just need to re-think your strategy in the current marketplace and make it work for you instead of against you.
Suzanne Grace is a real estate agent in Thousand Oaks, California.