The real estate market has been a wild roller coaster ride over the past decade which has left many homeowners out of touch with the current value of their home, often their biggest asset. This is not a good position to be in especially when you want or need to sell at a particular time and may have time constraints such as a move date.
I have complete confidence that when you price your home correctly your house will sell. Kittitas County has seen declining home prices in recent years but we still have seen many sales, 415 over the past 365 days. In this same period there have been 368 expired listings mostly due asking prices which have been too high.
I have compiled a list of pricing tips, below, to sell your house in the current market conditions.
Tip #1: Conduct Research
Sellers do a great disservice to themselves by failing to conduct research in their market area. I always hear about the listing down the street but rarely to people follow up to find the actual sales price of these homes. Listings may be the competition but if you want your house to sell then it is best to research the recent closed sales of the area as this will provide the best and most accurate portrait of the market and what price you can actually expect to fetch.
Ellensburg and Cle Elum real estate data indicate homes typically sell for 10-12% less than the original asking price. Sellers who expect a sales price similar to the houses listed around them would typically be 10-12% over the actual market value of their home.
The best way you can be properly informed is to have a real estate professional complete a comparative market analysis or conduct an appraisal on your home. A real estate broker or real estate appraiser will research the recent closed sales in your market area and find those sales that are most similar to your home. They will then let you know what the most realistic sales price is based on the comparable sales in this market.
Tip #2: Hire a Real Estate Broker with a Realistic Pricing Plan
When you interview Brokers make sure they can supply you with comparables that back up their pricing plan for your home. They should be able to explain their pricing opinion, backed by actual sales and listings so that you can be confident that you are listing your home to compete with recent sales and current listing, after all you want to sell your home and not just show it off.
It is not uncommon for some Brokers to present a high asking price to get your listing, and then start persuading you to lower the asking price over the next several weeks and months as your home sits on the market. This practice is called “buying your listing” and only cost you time, money (more mortgage payments, taxes, maintenance, etc.) and often results in a stagnant listing which other Brokers and Buyers will overlook in future searches.
Tip #3: Leave Emotions out of the Sale Transaction
The time, money and sweat you poured into your house makes it very difficult for most homeowners to separate their emotions from the financial transaction of selling their home. This is especially true when it comes to the cost and time of building/remodeling versus the actual value you may see out of it in the market. A realistic selling price may be less than the cost of the work, time, materials, etc. that you have placed into the home over the years.
A Buyer who may have only spent 30 minutes in your home has little to no emotional connection to it; they are making an offer purely on the statistics of the market. If a similar house is listed at a lower price guess which when they will buy…….not yours. If a Seller gets emotional or is offended by an offer the Buyer will typically see this which in turn can cause a potential sale to fall apart.
The easiest way to stay emotionally disconnected is to hire a Broker who won’t have this emotional connection to your home and can negotiate with a Buyer who is basing their decision on the sales and listings of the market. Your Brokers will present the facts to the Buyer and they in turn will present their facts to the Broker.
Tip #4: Start with a Realistic Asking Price
Often I hear homeowners ask why not just list higher and see what happens, maybe we will find a Buyer who just loves our house and is willing to pay top dollar. Unfortunately this is not typically how Buyers view listings, they may love your home but unless you are the only home for sales in the area, they have other options and in the end will make a purchasing decision on their needs and financials rather than just for the love of a house. This is especially true in this current market when there are plenty of listings to choose from.
An overpriced home will have much less traffic even as a new listing. This is not a good scenario for the Seller as the first few weeks will typically see the most activity. Once a Buyer sees an overpriced home they will move on and will not typically go back to reconsider your home even at a lower price. New Buyers who see a lowered asking price but a longer marketing period will wonder why your home is not selling and feel that there must be something wrong with it.
Being realistic on the asking price favors the a Seller the most and will likely save you money on mortgage, tax and other homeownership expenses which will accrue during a longer listing period caused by an asking price which is not supported in the market.
Tip #5: Don’t Chase the Market
It’s no secret to anyone, home prices have fallen in almost every market across the United States. Locally the Cle Eum and Ellensburg real estate markets have seen property values drop 10-30%, in different areas of the County, over the past 4-5 years. If you want to sell I always advise against chasing a declining market as listing at an unrealistic price does you no favors in actually selling your home.
Finding the top or bottom of the estate market is like trying to find the top or bottom of the stock market, unfortunately you only know about it only after the fact. A Seller who wishes to list high and then try to incrementally lower the price to meet the top of the market may just never quite get there.
Incrementally lowering asking prices over weeks and months will scare off many Buyers who are looking at recent listing and sales in their decision making. An old listing which is perceived to have an unrealistic Seller will turn off Buyers who will wonder if your home has issues or if you are not a good party to negotiate with.
Tip #6: Keep the Lender in Mind
Most Buyers require financing to purchase a home which means an appraisal will most likely be conducted by the Lender. Even if you managed to list high and find an accepting buyer, an appraisal will follow and a realistic price will be relayed to the Lender. The Lender may require a renegotiation of the price, a much larger down payment or a denial of the loan altogether; turning a promising deal into a dead end. This will cost you time, money and require explaining to prospective Buyers on why the house was taken off the market and now is back on after a failed transaction.
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