HOW DO YOU REALISTICALLY SELL A HOUSE IN TODAY’S MARKET?

As we move into the new 2012-year of real estate, you might be thinking now of better strategies to move inventory than you did last year and the year before last. Where you successful at getting full asking price in 30 days or less? If not, this might put it in perspective.

If you have a seller now or in the future this tip might be the best insight we can pass on, it’s simple, realistic and it works. 

Realistically, housing prices are going down, some have stabilized but that can all change at a moments notice. If your sellers think they want top dollar for their house…good luck, you are wasting your time, your money and their time too, especially with spring looming around the corner you'll be dealing with more competition on the market. Remember, you are dealing with the shadow inventory as well that can even bring your sellers home into a lower price category with stiffer competition this spring/summer.

If your house is not the best of the best and priced to move you are only setting your sellers up for failure. The longer it sits the more likely the sellers takes a bigger loss and or withdraws the listing leaving you with no commission and a frustrated seller who may use someone else.

Tip: What your sellers lose on the sell end they can EASILY make it up on the buy end with price drops and interest rates at an all time low! They may even get a bigger home with better upgrades, lower interest rate and lower payment in the end. I typically just tell my sellers, “You’ll get much less than you may have hoped for your home...but you’ll also pay much less for the house you buy, so it really balances out. If you wait for your home to go up in value, then that home you eventually buy will also go up. The most important factor is you should SELL now while the interest rates are at an all time low. These rates will not last forever.”

Here is a great scenario for sellers thinking about selling their home and might be wavering - Housing values increase in a strengthening economy.   In a strengthening economy, interest rates also rise.

If we can make some assumptions here is where it makes since.

A seller owes $200,000 on his home today, and can only sell it for $225,000. 

The same seller wants to purchase a home currently on the market for $300,000 (they just had twins and need more room)!

The wife wants to move ASAP because she is smart the smart one.  The husband says babies are small and we can wait at least a year because we should be able to sell our home for $250,000 and that is what he feels it is worth because after all we believe everything the newspapers tell us.

Scenario 1:  The wife wins.

        They sell their home for $225,0000

        They purchase their new $300,000 home and put down $25,000

(this is simple math as I’m not using realtor commissions and other costs).

        New home loan is $275,000 on a 30 year fixed mortgage with a rate of 4.00% =  $1,312.89 monthly principle and interest

Scenario 2:  The husband wins.

        They sell their home 12 months from now.  The economy is rocking and they saw a 10% increase in value.   They sell their home for $247,500

        The home they were hoping to buy a year ago for $300,000 went off the market and just came back on the market at $330,000 (10% increase in value)

        They purchase the home for $330,000, putting down $47,500 from the sale of their home.

        New loan is $282,500 on a 30 year fixed mortgage with a rate of

4.759% = $1473.65 monthly principle and interest

They sure wish they would have bought and sold a year ago, because now they have an additional $7500 in debt and extra $160 per month in payments, not to mention the additional interest they are paying. 

This is truly the current market we are in at the moment.  Consumers are waiting to sell because they do not want to sell for less than they paid...even if they have equity in their home. Now you know where a big portion of that shadow inventory lays.