To truly understand the present, we must understand the past and that information will help us predict the future. The housing market is a moving object and we can only guess where it will go, but if we have a sense of history, it will make it a much more calculated guess. When I prepare a market analysis for a potential seller, I select only the applicable homes that have recently sold, are in escrow or are currently on the market. I first give the seller an overview of the market in general and then their specific neighborhood. Even though Pasadena is a smaller city (approximately 148,000 residents), it has distinctive trends by neighborhood and even streets and blocks. The more specific the data to the seller’s home, the more accurately we can project what the appropriate list price should be. The pricing strategy will then set the stage for a successful marketing effort, resulting in the best price for the market.
Sellers will be dealing with a very sophisticated buyer, who has a tremendous amount knowledge about the area’s recent home sales. They most likely have been in those very homes and have firsthand knowledge of their condition. When you price a new listing, a seller must be guided to select a price that is perceived as both fair and represents a good value. The value quotient is very important. A buyer wants to feel that they are investing in good value. If there is a positive mind set going into the negotiations, a buyer will feel more comfortable in going higher than the list price.
When planning a timeline and strategy to list a property, I like to explore as many unknowns as possible with the seller. If we are able to do any customary inspections, city required conditions of sale or general preparations in advance, it allows the seller to anticipate what issues might arise during escrow. The following are areas you should explore prior to putting your home on the market:
· What is the activity in your specific neighborhood? As a community of custom homes, there are not a lot of truly similar homes in a neighborhood. The “apples to oranges” comparison is very tricky. In other communities, there are tracts of homes all built by a single builder that are truly the same. In our area, the agent must have the historic perspective to have seen each of the homes used in a comparable analysis, as they will vary by design and finishes.
· What additional information about your neighborhood could affect the sale of your home? This includes historic designations or restrictions for the house or neighborhood, as well as other city requirements. In Pasadena, the city requires an Occupancy Inspection for health and safety related issues. The inspection can reveal violations that the inspector will call out to repair/correct. I always suggest to get this inspection competed prior to the house coming on the market, in case any previous room additions or remodeling were done without permits or city approval.
· What are the planned traffic routes or government eminent domain issues? Having knowledge of local city planning trends and historic issues is extremely important when selling a home.
· How will seasonal selling trends impact you? Pasadena has specific times of the year that are historically the most active periods for buyers to purchase homes. The highest number of transactions occur between March and June. They represent approximately 50% of the annual volume. The next busiest time is mid-September through mid-November, representing approximately 30% of the annual volume. As the markets are cyclical, these do change slightly, but generally speaking, the best time to sell your home is before summer and before the holidays.
· If your home doesn’t sell right away, what should you do? If a home doesn’t get an offer in the first three weeks it’s on the market, then something is not connecting with the market. It could be a floor plan challenge, adjacency to a busy street or that the price is not positioned correctly. At the end of the day, it is always about the price. At the right price, every property will sell!