I had just finished meeting with a Valued Seller in South Holland, Illinois when I got the call from a potential Seller in East Hazel Crest, Illinois. She informed me her tenant had given her notice they did not intend on renewing the lease. She said Dale I'm just tired of being a Landlord.
I asked her my standard questions, how much is your mortgage balance? Can you make a list of all the improvements you've made in the last 5 years? She shared her mortgage balance is around $116k, and due to a fire, the home had been completely renovated in 2009. Upon my review of the com-parables, I discovered there had only been 3 sales in the entire Village in the last 365 days. The highest sale had been around $80k. The sold com-parables comprised a regular sale, a short-sale, and a foreclosure sale.
You can imagine how it sadden me to inform her there were no supporting sales high enough for her, to at the very least sell her home high enough to cover her selling expenses. The timing of her call was perfect because upon leaving my new South Holland listing, her home was only about 4 minutes south of my new listing, resulting in a short trip to do a drive by and take a couple of photos of the home.
This past Saturday was a challenging day because the home I listed in South Holland has 2656 square feet, was custom built in 2000, with $10,218 in real estate taxes. I listed this home for $190k primarily because the most recent and usable com-parables in the neighborhood were also short-sales and foreclosures. There are four bright sides to this listing for the Buyer.
The mortgage balance is low enough where-by this home is not upside down. There are no tax exemptions claimed by the present owner. The Buyer can look forward to a reduction in the real estate taxes once they claim their homeowner exemption as the new owner. Plus, in a normal real estate market, this home would be worth at the very least $50k-$75k more.
Since 2008 I have been having to tell my Valued Buyers purchasing in the Chicago South-land, they must purchase a home for all the intangible values like sufficient living space, desired amenities, choice location, school ratings, commuting considerations, safety, and the peace the home gives them. I've had to tell them if they really want a specific home, don't plan to call me in a minimum of 5-7 years from now expecting to realize a profit from their home.
I've had to explain too many times, until the short-sales and foreclosures are not a commonplace in the local marketplace, the marketplace is still going to remain unpredictable, and will not stabilize.
What I mean by this is in a normal marketplace short-sales are rare, and foreclosures might comprise of no more than 6% of the total inventory of homes on the market. I'm serving a marketplace with those two segments of the market combining to be as much as over 30% of the available inventory. I know this reads as doom and gloom.
This is why I am sharing real stories of what actual valued Clients are realizing in the marketplace I serve, and what a recent Saturday in early January 2013 was like for me.
Back in October 2012 I closed 3 transactions. One was a townhome styled condominium in Orland Park, Illinois. It sold for $320k. Fortunately, there were barely sufficient sold com-parables to justify the sales price. The 2nd property was a fully renovated 6-flat in the Washington Heights, near the desired Beverly neighborhood selling for $300k. This property was not so much an appraisal issue, as it was simply finding a Lender willing to finance the property issue. It took my conducting a lot of research to find a commercial Lender US Bank willing to finance a well qualified Buyer at a reasonable near current market interest rate.
The 3rd transaction was a newer upscale home in Flossmoor, Illinois. The Sellers had over $700k invested in the home, selling due to a job relocation. I assisted my Valued Buyers in successfully negotiating a $501k selling price. Once again, when I conducted the sold comparable research before preparing their offer, I discovered no home on the subject's street had sold for more than in $300k range within the last couple of years.
One more time I had resource my Valued Buyers, if they really wanted this home they would have to resolve to live in it for the very long term before they could ever expect to realize a profitable sale within the next 5-7 years or more. Although, the home did appraise, I had to help them to understand an appraised value is not the same as what the marketplace may produce, as a willing and able Buyer willing to pay the appraised value.
My respected colleagues who serve a different marketplace, below share very common factors relating to determining true market value of a home. They help potential home sellers understand emotion, ego, and pride are emotional baggage successful home sellers unpack quickly to get a home sold.
The most common reasons homeowners overprice their homes are emotion, ego and pride. Keep this in mind when setting the price of your home. Click here to learn The Worse Home Selling Mistakes.
You have a lot invested in your home, both financially and emotionally. With such a hefty asset, it's understandable that you'd want to make sure you're positioned to get the highest sales price possible. If you price your home to high, however, you run the risk of potential buyers passing it over.
The key is to find the true market value of your home. Click here to find out how market value is determined.
Sometimes it is difficult to establish an accurate market value; in fact, it can be very easy to overprice your home. Your house is a source of pride so it is natural to think it's as valuable to others as it is to you. You may want to get more for your house than your neighbors did, despite the fact that they sold 5 years ago in a stronger market. Or possibly you've lived in a home for a long period of time and it is difficult to accept that the neighborhood is not now as desirable as it once was.
The market value of your home is determined by recent sales of homes similar to yours. When you are ready to put your home on the market click here to contact us and request a "Free" Comparative Market Analysis which will provide you with recent home sales similar to yours.
Paying attention to the the Comparative Market Analysis will position you to intelligently select the correct market value for your home. Doing so will save you thousands of dollars and also help eliminate many of the negative emotions that go along with selling your home.
Overpriced homes sell slower and for less. Click here to learn why.
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