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This article was written by my good friend, Sandy Shores, a Realtor in Melbourne, Florida, but the message is universally applicable. In a soft market, there are many competing properties for sale. Sandy said it better than I could. Thanks to her for sharing this article with my readers:
I recently went to meet with a seller that has an interest in putting his house up for sale in Melbourne FL.
I asked him to walk me through the property and tell me what he could, so I would get a better "feel" for the house. When we finished our tour and sat down at the kitchen table he looked at me and told me that he didn't have to sell. He continued, 'the difference between me and other sellers is that I don't have to sell. I'm not going to give my house away. I can wait.'
This isn't the first time I've heard these words and it won't be the last.
I think that many sellers feel like this. I remember when I sold my house 10 years ago, I didn't want to "give" my house away, either.
Sellers today are smart, and they pay attention to what's going on in the market. Many are aware that our market is full of short sales and foreclosures (those that aren't frozen) with some very attractive price tags on them. But, they must be reminded that they are competing with these properties when their house goes up for sale.
They know that prices have dropped and that the market isn't what it used to be in 2005-2006 when houses were going for top dollar. Here in Brevard County FL our median price has dropped down to $100,000. That's the lowest it's been in eight years. But, interest rates are the lowest they've been since 1951 so there are buyers out in the market, today.
But, sellers must be realistic in order to sell their house today.
When sellers tell me they can wait, I ask what they will be waiting for. And, the answers are varied.
Some are waiting for the right buyer to come along that will pay their price. Unfortunately, these owners may be waiting till the cows come home. The house has to appraise in today's market based on recent comparable sales. Unlikely, if it's overpriced.
Some are waiting for the market to turn around and prices to go back up. Oh, how I wish that my crystal ball was working, but it's broken. What if the market goes down before it heads back up? How long will a market turnaround be? 3 years, 5 years, 7-10 years? We have heard different scenarios. No one knows for sure.
If the house sits vacant waiting for a market turn, that's not good either. We must be concerned with fire, theft, vandalism. Insurance companies don't like a house to sit vacant for more than 30 days, otherwise many will cancel the policy. And, it's tough on the working systems of a vacant house. Rubber gaskets and seals start to dry up and crack. Septic systems can start having problems. Pipes and motors freeze up from non usage. Any number of things can go wrong.
And what about holding costs - mortgage, association fees, water, electric, yard mowing? How much will those amount to over the long term?
Is the seller going to rent the house out until the market turns? Does that seller have the stomach to be a landlord, dealing with tenants and toilets? When the tenants move, the house will need a thorough cleaning and painting. What if any damage is done?
If this house is going on the market, it's so important not to overprice it. Statistics show that overpriced listings take much longer to sell, and when they do eventually sell, they sell for much less than if they were priced properly in the beginning.
So, when a seller says, 'I don't have to sell. I can wait.' My question always is, 'What will you be waiting for and can you afford to wait?'
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.