Sell It In The Slow Season
Story from HeraldNet.com, November 26, 2006
Summer, the prime time for selling a home, was approaching and Jeanne and Eric Mehan wanted to sell fast.Wow, that was some bad advice. Weren't the flippers mostly gone by fall?
In the rush to sell before fall, the Woodinville couple acted on some bad advice.
Put it on the market, full of clutter, not cleaned, at top price, even if it's not ready, advised their real estate agent. Let's market your home to a flipper, someone who wants to buy it, fix it and resell. Let's see if we get a nibble and you can work on it in the meantime, the agent told them.
Half of the asking price! Now we're talking...The agent took marketing photos of the laundry room with the toilet seat up and dirty clothes piled on the floor - with his cell phone camera.
The Mehans' house got some foot traffic and a few offers for half the $475,000 asking price. Meanwhile, the precious summer season faded. The agent suggested pulling the property off the market and re-listing.
Don't you just love a happy ending?"At that point I wanted nothing more to do with him. I fired him," Jeanne Mehan said.
Now it was fall and the holidays were around the corner. Could they sell their home quickly during a traditionally soft market?
The months before Christmas are often considered a difficult time to sell a home. Potential buyers are hunkered down for the holidays and sellers don't want to mess with listing a home during those busy months, the thinking goes.
Fewer people are buying single-family homes and condominiums in November, December and January, according to statistics kept by the Northwest Multiple Listing Service.Pending sales were at their highest last year in June, with 8,896 recorded in King, Snohomish, Pierce and Kitsap counties. By December, sales had dipped to almost half of that, with 4,837 recorded.
That doesn't mean selling is going to be a cakewalk. Houses need to be priced what they're worth, agents need to market homes aggressively and sellers need to be willing to clean and fix problems, Deptuch said.
Buyers are pickier than ever, she said. Buyers expect the walls to be painted and the carpet to be in good shape. They want homes clean and free of clutter. Buyers want to walk into a home and feel like it could be theirs, she said.
The Mehans moved extra belongings into storage and hired professional cleaners. They painted the house in and out, replaced dated garage doors and put in a new lawn. The house got new light fixtures, doors and carpets.
The result: the couple put their house on the market for $429,999. Within a dozen days they received three offers and a sale is pending.
(Debra Smith, HeraldNet.com, 11.26.2006)
4 comments:
jcricket73 makes pertinent points. Actually, it's not entirely the agents' fault that sellers are so greedy and make those bone-headed mistakes. Most sellers will not initially work with an agent that gives them too much reality at once.
Thus, one tricky art to listing homes is "educating the seller," which means taking a listing with a stubborn seller at an inflated price, and letting reality sink gradually in. Most agents would love to price their listings aggressively, but the sellers just have too much emotional capital invested to make the call objectively.
In short, if you want to kiss the listing good-bye, be up-front and genuine with the homeowner.
Any wonder that a majority of agents are "extravagant" with the facts?
I was hoping to post this on today's open thread.
The National Association of Realtors said Tuesday that existing home sales edged up 0.5 percent to a seasonally adjusted annual rate of 6.24 million. It marked the first sales increase since February.
However, the median, or midpoint, price for a home sold dropped to $221,000 in October, a decline of 3.5 percent from a year ago. That was the biggest year-over-year price decline on record. It marked the third straight month that home prices have fallen compared to the same period a year ago, the longest stretch of such declines on record.
We have only begun to set records. Remember, none of the bulls even hinted at this, so disregard their calls for a booming Spring selling season.
This is going to be really, REALLY ugly.
Stephen,
The reason a slight rollback is the cause for panic is from the leverage used.
If there was no leverage (homes were purchased for 100% cash), and you made 100% over 3 years, and then gave back 20%, it is a big case of "so what?"
If you levered-up to get into your home, and then borrowed against the equity, and you know your house is overvalued, you are in big trouble.
Also, much of the retail sector is addicted to HELOC spending, and the spending from those employed in the REIC.
It would only take about a 15% rollback in prices to create a scenario where you have universal equity destruction, and massive bank defaults/liquidations.
It is in that aftermath that you will see price reductions around 50-80% off the peak.
Then you will have panic - and it will be justified.
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