PRICE TO SELL NOW OR HOLD ON FOR THE RIDE!
It still amazes me that even after all the doom and gloom in the last few years that the majority of sellers that contact me and want to sell are still using an old and outdated strategy of pricing their properties to negotiate rather than pricing them ahead of the downward curve and price them to sell! Statistics show that property values in the Metro-Detroit area are declining 1-2% per month. Once a seller has interviewed several agents and selected the agent they fell is best suited for them (generally basing their opinion on LIKE, TRUST, CARE, COMPETENCE & WORTH) they should spend a great deal of time studying the market facts. All the servicing and marketing in the world cannot cure an over priced listing.
I recently had a call from a seller just furious about the fact that his home sale recently fell through. He began blaming his agent and appraisers and (basically everyone in the transaction.) Upon discussing the situation further, I determined that his agent DID review with him the facts (as they were 6 months ago) in the marketplace. I determined that while they were high in price 6 months ago they made only one slight price adjustment to their asking price and that was 4 months ago. When I pointed out the fact that out local studies were showing that our area was declining roughly 1-2% per month, he quickly stated that if he had seen this information at the time of listing, he would have gladly participated in a game plan regarding the pricing on his home to stay in tune with the market. *I want to point out two things here. First, while it is impressive that he says he was willing to listen to market statistics that were never presented to him, their was still one important piece of information that I had to point out to him and that was in order to sell a property in today's market, "You MUST Price your property AHEAD of the market in order to achieve the greatest return." In other words in a declining market most people that need to sell would rather loose just 3 dollars as opposed to loosing 5 or 6! You see, he was understanding the fact that you MUST use hard market statistics to make educated decisions, he was still wanting to price his property WITH the market as opposed to pricing it ahead of the market. While it could be an up hill battle to find a buyer that will pay more in today's market for your property than what it is worth, it is entirely possible. Finding this buyer could still end you with a tremendous amount of wasted time when the appraisal comes back short. In his case the appraisal came in approx 10% short. Using the simple math that I laid out already, if he and his agent had priced the home just 2% a month less at the beginning, they would be at what the market was saying the home was worth and not short. *In addition, homes begin to develop the stigma of a problem property after a certain amount of time spent on the market. Remember that the entire marketing process and then the processing time of the sale could take as many as six to eight months at which time you will only find that values have fallen further than the value the market was telling you like yours were selling for.
The many foreclosures that you have seen enter the market have affected values, yes. Be advised that we are still not even half way through the storm however. In my best but most humble opinon, I see a minimum of 2-3 years left of the market that we are in before it even begins to get better. You see in Michigan, homeowners have a six month redemption period (even after they have been foreclosed on which is normally 120 days after missing their first payment) in order to "redeem their home." So, long story short... What I am trying to communicate here is that IF you have decided to sell your home either NOW or at any time within the next three years... Pricing your home above fair market value and leaving room to negotiate is OUT! (Pricing your home higher than the fair market value in order to come down in your price and make the buyer feel that he/she got a deal.) Price your home ahead of the curve. Price your home to SELL. I am not saying that you must price your home to give it away. Pricing your home just 2-4% BELOW what the current market is bringing *Coupled with a marketing plan that is interactive and gives your property 24 hour exposure, interest will begin to be sparked. It is ONLY Then when there is interest that is sparked that your advocate can go to work for you and defend your equity (or what little is left.) Pricing your home by using market facts and ahead of the downward slide will give you and your agent the best possibilities to choose from. You may still (even in this market) be able to stimulate multiple offers. (I've delivered these to my clients even in this market and we were ended up over our asking price quite a few times latley too! It takes an agent with Zest to be able to create this however.
Not all agents are created equal! Not even close, so select your agent wisely. The little amount of equity that you have left in your home can be freed ONLY if you make educated decisions in your home sale.
For those that are upside down in their homes, there are answers for you out there as well. The most common is something called a "Short-Sale." Not every agent knows how to work them. List your home with an agent "Certified" in handling Short-Sales. http://www.carlogobba.com/
PRICE TO SELL NOW OR HOLD ON FOR THE RIDE!