Though the public opinion is that the real estate market has slowed down this past year, it is still a good time to sell.  Statistically speaking, YES sales are down and in some areas home values have even dropped.  However, this market change is a healthy one that will help our real estate economy in the long run. 

The real estate boom that we all fell in love with was good while it lasted, but was simply not sustainable.  Many investors and home owners bought beyond their financial capacity, banking on the short term gains from this rapid appreciation.  Many are in serious trouble, and foreclosures are now increasing rapidly.  Today it is more important than ever to market effectively and affordably.

Besides the fact that appreciation rates are predicted to do well this year, our current market is not "bad".  True, it is slower than the past few years, but a little less than awesome is still very good, right?  Think back to previous decades when interest rates were well over 10% and co-op brokering didn't exist...now that was a tough market to sell in!  So, I'm asking you, the agent or owner, to re-frame your perspective on the market and possibly consider a new approach to marketing your real estate.

The key is to market a home effectively, not traditionally.  When I consult with my prospective clients who are thinking of selling their home my first objective is to listen to their needs and second to formulate a customized & effective plan for marketing their home.  I don't want to overcharge my clients for services that in my opinion are time consuming and not effective.  I encourage every other professional to do the same; don't sell fluff, for your sake and your client's, run lean and mean...MARKET EFFECTIVELY.

In my experience, selling a home in any market is all about the "3 P's" of real estate, as I call them.  They are, in order of importance:

1. PRICING

2. PROMOTION

3. PRESENTATION

For now let's just focus on the 1st "P", PRICING.  The most common and easiest mistake that home owners make when they are trying to sell is inaccurate pricing.  Not surprisingly, owners are most likely to overprice their real estate.  The common attitude is, "We're in no major rush to sell, let's see how much we can get for our house."  There is nothing wrong with this mind-set, however overpricing will actually cost you more than it profits.  

The first 30 days that your home is listed are the most critical, and proper pricing is essential within this time frame.  After 30 days your home will start to age on the market.  Buyers are looking to pay fair market value or more on fresh new listings that are priced well; once a home has sat for a while, the mind set of the buyer changes.  They see that the home is not in high demand and they try to haggle the price down to get a good deal on the property.  The longer a home sits on the market, the lower the offers get until the owner is in a position where they have to sell and are forced to take a lower offer.  

Most buyers are familiar with the markets that they are shopping in; they have looked at other listings and know what they should get for their money.  If your home is overpriced it will bring people into your home that are expecting more than it offers, and it will keep your target buyers from viewing it because it is out of their price range.  Ultimately this keeps your home on the market longer, and therefore makes it less desirable.

On the opposite side of the spectrum there are those who underprice their homes for a quick and painless sale.  There is a time and place for underpricing a home, but unless it is absolutely necessary it is not a good idea.  Underpricing not only hurts the seller's bottom line, it slows down the appreciation rates of neighboring homes.  Pricing your home too low does often accomplish a speedier transaction, but it also means you walk away from the closing table with less than you should have settled for.  Furthermore, since the majority of residential appraisals are accomplished using the market comparison approach, the price that you sell your home for could show up on the appraisers report of a neighbor looking for the highest value they can get.

Pricing is a basic ingredient for selling anything, however, it is undoubtedly the most important element.  As for techniques being used to get an accurate price, that is a different topic for another time. 

I am willing to answer questions about pricing methods and share my method for valuing a home.  Home Owners, let me know if you have questions about the value of your home.  Professionals, feel free to add your thoughts or techniques to this message. 

Next I will cover effective promotion of real estate, which is the real meat of a real estate agent's services.