This is the toughest market I have seen in over 45 years of real estate brokerage. There are many obstacles to selling. however, the vast majority may be overcome with a knowledgeable broker. The most difficult obstacle is proper pricing. Many property owners are unrealistic as they want to price their property in accordance with the higest prices ever obtained. This is a profound mistake ! Just as the price of gold and stock changes so to does the value of real estate. Prices prior to Katrina are profoundly different than prices in 2011. Many property owners declare when attempting to sell today at an inflated price. that they really do not have to sell. My response is basically that you won't sell unless the price is right. Market value is defined as the price at which a willing seller will sell and the price at which a willing buyer will buy, neither being compelled to do so and with a reasonable time alloted to market said property. Notice the emphasis on neither buyer or seller being under any compulsion and reasonable market time. Given these two factors sales should reflect an accurate market value. The fact that a seller does not have to sell will not usually compel a buyer to pay an inflated price. How is market value determined ? It is determined by analyzing the sales prices of similar properties within the recent past, normally six months, and comparing how these comparable sales compare to the subject property and making plus or minus adjustments for differences in the comparables compared to the subject. This will give you an accurate idea of market value. The fact that your neighbor is asking $300,000 for his house (which has been for sale for 2 years does not determine the value of your house) and is not a consideration in determining value. When and if your neigbor's house sells check the actual sales price-NOT THE LIST PRICE- invariably you will find a substantial difference between the two.
This assumption on an owner's part that a neighbor is asking such and such for his property and that must make mine worth such and such, plus some, is erroneous but I often encounter it. I choose to deal directly by explaining that asking prices which are too high do not increase the value of surrounding properties. If you price your property in accordance with overpriced listings in your area, you will wind up just like them. On the market for lengthy periods of time ( some times for years) with few if any showings, no interest and after a while the feeling that something must be wrong with that house-because it has been for sale for a long time. This is not the way to get your property sold ! Again, it must be placed on the market at what it is worth today, not what it was worth several years ago. If you can not accept this fact, do not attempt to sell as it will be an act of futility. Some unrealistic sellers want to blame difficulty in financing in general as the reason their property has not sold. This is usually a rationalization for overpricing and difficulty in obtaining financing rarely hinders the sale of accurately priced property. If you have a property which you wish to sell please adhere to the following.
1. Hire a competent broker who is knowledgeable in the market in which your property is located.
2. List your property no more than 3-6 % above fair market value, based on recent sales.
3. If within 30-45 days you have had little activity and no offers, consider a reduction.
4. Consult with your broker frequently and ask for and follow advice and recommendations.
5. Incorporate into listing a provision wherein you agree to pay a certain amount of closing costs.
6. Last but not least-BE REALISTIC WHEN OFFERS DEVELOP-and ask your broker for advice
One final word of advice. Hire a professional not a part time weekend warrior. Amen !
This article was written by Loyola Graduate Larry Trunk, President of Larry Trunk,Inc,January 2011