Spent most of last week previewing homes for two buyers, then showed the selected homes this last weekend. One of my buyers is in the range of $500K to $600K, and the other from $1,000K to $1,300K.
In the lower range I previewed 28 possible listings and narrowed it down to just 2 single family homes in Pleasant Hill and one townhome in Walnut Creek. The rest were in such bad shape and overpriced that they were not worth showing. Two single family homes in Pleasant Hill were in pretty good shape but priced a little high for the area and size. I'm still amazed at what some selling agents think their clients are going to get for a home with little appeal, needs work and cleaning, and is overpriced. You would think with all the homes on the market now, in August, a slow month, it would be easy to find the right one for buyers, not so.
My buyers in the higher price range are experiencing the same frustration. We did find a home listed in San Ramon for $1.4m that is perfect, except it's overpriced by at least $50k. I've already spoken with the listing agent and she agrees the home is overpriced but the sellers think it just needs more time on the market and they are not in a hurry. It's been active now for about 50 days. The last home that sold in that neighborhood, same model, sold for 1.31m. The lot is not as premium but it's definatley not a 90k premium. Even if my buyers decide to make an offer it will be written closer to 1.3m than 1.4m.
My high end buyers came across a home for sale they wanted to view but it was not on the MLS so no access is provided. It was supposed to be open Sunday but wasn't. They gave me the agents number to find out more. I called the out of area agent and found out the agents daughter (she is also an agent), owns and lives in that home. She is not in a hurry to sell and won't put it on the MLS because they don't want to pay a commission to a selling agent, they are hoping to get a walk in buyer. The home is overpriced by at least $100k according to the area comps, and they indicated that the price was not negotiable. They suggested that a selling agent wanting to get paid, write the commission into the offer, over asking price, with the buyer's permission. Not very professional as far as I'm concerned.
My buyers have told me they no longer want to look at that home if the seller won't negotiate price and terms. I pride myself in educating the buyers I work with. By the time they are ready to make an offer they know as much about the local real estate market and prices as I do. My job is to give my clients the information they need to make an informed decision.
As we approach mid August, and there is still a large and growing inventory of unsold homes and home loans are harder to qualify for, something will have to give and I believe it will be the price. Most sellers have owned these homes for at least five years. In the last five years alone the homes have doubled in price (not really if you can't sell the home.) If you want it sold you'll have to price your home so it is the best value in the neighborhood. I don't care if it needs work, price it accordingly. Don't price it like it's in excellent shape and a good location when it's not.
Myself and my buyers are moving on to new listings as they come on the market. They are ready to pull the trigger as soon as the right home, priced right, comes on the market. If you are a seller, remember, there are buyers out there but you have to price according to market conditions or buyers will keep looking.
If you want to make sure your home is priced right do this. Visit all the homes in your area that are competing with yours for buyers. Make notes about each listing, pricing, location, condition and amenities. Once you've done that go back home and see how your home stacks up against the competition. Would you buy your home again at the current asking price or would you buy one of your competitors. This is how buyers select their next home purchase. It might just open your eyes to how well pricing works in the current market conditions so you can get your home sold.
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