Sellers can minimize discomfort by selling sooner

"Denny, you have had our home listed for two months and it's still not sold. Don't you think we need to come up with some creative marketing ideas?" These were the words from one of my sellers this week.

Being a curious cuss, I asked them what they meant by "creative." They quickly shot me a couple of ideas like providing owner financing or being willing to lease-purchase the home. They even offered to vacate themselves, their kids and pets from the home, leaving their furniture and accessories behind. My puzzled look quickly prompted the explanation that they would be willing to move to a furnished rental so they (she) could have their life back. Cleaning the grout with a toothbrush every morning before work was cutting into the joy of home ownership. These sellers are not having fun. They are not alone.

Selling isn't for sissies, especially in this market. On the fun scale, putting the home you live in on the market ranks somewhere between being forced to attend a wedding (even your own) on any weekend day that happens to be sunny and a root canal without Novocain. It would stand to reason that if something caused that much distress a person would want to be put out of their misery as fast as possible.

Too many sellers make the choice to prolong the pain caused by the inconvenience of selling in order to avoid the greater pain of accepting the fact that the market value of their home is less then what they want or need. That's what prompts them to look for any alternative, other than a price change, that will shorten the sales time. There is no miracle cure, although I have heard that the maker of Night Diet, the diet pill you take at night that causes you to wake up skinny, is coming out with Night Sale. If you're lucky, they will throw in a set of steak knives with your order.

During the first quarter of 2008, there were approximately 2,500 pending home sales and 40 percent of those sellers were able to sell their home without changing their initial listing price. That does not mean the home sold for the asking price, because it probably didn't. It does mean that the listing agent gave good advice, and the sellers listened.

There is no such thing as painless selling in this market. The goal for sellers should be to minimize the pain. The successful sellers mentioned above had to deal with pain too, but they bit the bitter pricing pill at the beginning of the listing period, instead of months later. Their pain was short-lived because 60 percent of these sellers' property sold in the first 30 days. That is a manageable length of time to keep your home looking like nobody lives there.  

Statistics also show that the faster you sell, the closer to the asking price you will get. For example, homes that sold in less than 30 days sold for 98 percent of the original asking price. But that percentage dropped to 94 percent, 89 percent, 86 percent and 79 percent for homes that were on the market 30, 60, 90 and 120 days respectively.

Another interesting fact is that if the property is not sold during the first 30 days the probability that it will sell without lowering the asking price drops by 66 percent. Of the 16,000 homes for sale it is alarming to see how many have been on the market for months at the same asking price. The real estate definition of insanity is to keep your property listed at the same asking price and expect different results.

Another benefit of selling fast is that you are eliminating market risk. Prices are declining, therefore the sooner you sell, the higher your selling price is going to be. I know a lot of sellers who wished they were realistic with their asking price 12 or even six months ago. The irony is that some of these sellers are still price resistant. I guess one can get used to driving a car by looking in the rear view mirror.

Success in this market is a team effort. The agent is responsible for an accurate representation, an appealing photo presentation and dissemination of the information to agents and prospective buyers. The seller controls the asking price, therefore the seller is the only one who can control the speed of the sale.

If your home hasn't sold yet, then you are facing one of two pricing scenarios. The first is that you have very little showing activity. This means that your home is priced so far out of the market that it is not even coming up on the buyer's radar screen. Your only course of action is a significant price reduction. The second scenario is that you have regular showings, but haven't received an offer. The good news for you is that your asking price is closer to market value, but you will have to tweak it a little in order to motivate a buyer to act.

I wish there was a magic potion, but that's it; there are no other answers, no painless quick fixes. I can come up with some creative marketing ideas such as hiring the Blue Angels to do delta rolls over the seller's home, but that won't cause it to sell. It will just make the day-sleeping neighbor mad.

Keep the Faith.

Denny Grimes - President Denny Grimes and Company